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.

Meanwhile, the U.S. cut its energy-related carbon dioxide emissions by 12 percent from 2007 to 2012,according to data released on April 5 by the Energy Information Agency. At 5.2 billion metric tons, the U.S. is now emitting the least amount of energy-related CO2since 1994. Not bad, especially compared with Europe, which reduced its carbon emissions by 8 percent from 2005 to 2011.

Who would have thought a few years ago that the U.S. would be curbing carbon emissions faster than Europe? Although the trends are going in different directions, they’re not unrelated. In a way, the U.S.’s ability to cut its carbon footprint has made it harder for Europe to do so. The Continent’s bungled cap-and-trade system is part of its problem, but it’s also being put at a disadvantage by America’s shale gas boom.


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