What we can learn from Europe’s cap-and-trade system

What we can learn from Europe’s cap-and-trade system "And there’s a new report (pdf) out today from the analysts at the Environmental Defense Fund, looking at the track record of Europe’s cap-and-trade system over the past seven years. Some of the lessons here are worth a closer look."

"Since 2005, the E.U. economy has expanded slightly, though there was an obvious dip after the financial crisis (that’s the blue line). But greenhouse-gas emissions in the covered sectors fell dramatically, by 13 percent (that’s the purple line). It appears that Europe is starting to sever the traditional link between carbon emissions and economic growth. Overall, emissions in the E.U.-15 fell by 9.2 percent between 2005 and 2010. For comparison, U.S. greenhouse-gas emissions fell 5.3 percent during this period without any cap at all. This is far from a perfect comparison, however, since the two regions have different economic situations, different supplies of natural gas, different histories, etc."