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Why the U.S. Is Cutting Carbon Faster Than Europe

Cooling towers operate at the RWE coal-fueled power plant in Weisweiler, Germany
Cooling towers operate at the RWE coal-fueled power plant in Weisweiler, GermanyPhotograph by Hannelore Foerster/Bloomberg

This week, European Parliament put a dagger in the Continent’s carbon cap-and-trade system.

Rather than choosing to reduce the number of emission credits in the system to better reflect the economic slowdown, Parliament voted to keep carbon cheap—real cheap. As a result, the price of carbon in recent days traded for as little as €3 ($3.92) per metric ton, compared with €25 in 2008. This means that eight years after Europe’s emissions-trading system began, with the intention of making it far more expensive to pollute the air, doing so is now about as cheap as it’s ever been.