Free-market U.S. beats Eurocrats on growth of CO2 emissions

From WSJ:

Once the supply of permits is more in line with the eurocrats' ambitious environmental goals, though, expect European industry to take a big hit. The number of firms moving manufacturing work to countries without emissions caps, such as China and India, will only grow. That might make Europe's emissions data look good, but it will have zero net effect on the world's production of greenhouse gases.

Some companies may elect to purchase cleaner equipment, but the rising cost of compliance -- i.e., buying more carbon permits at higher prices once the supply is slashed -- will eat into the money available for developing the next generation of clean technology. In short, Europe offers no magic solution for capping greenhouse gases.

America may even have a few things to teach the Old World. The U.S. strategy has been to keep economic growth strong and provide incentives for private industry to develop cleaner technologies. For instance, the Bush Administration has proposed $1 billion in tax credits for nine new coal-fired power plants that will double efficiency and reduce pollution compared with older generations. China is picking up on these tactics. This year it bought $58 million in machines from Caterpillar Inc. that trap methane in coal mines and use it to power electric generators.

If global-warming activists were as interested in lowering air temperatures as they are in expanding the role of the state, they'd understand that the key to reducing carbon emissions lies in unleashing the private sector, not capping it. That's the real lesson from the policies -- and the results -- in Europe and the U.S.