European system for cutting CO2 emissions is working well: Lessons to be learned for US, globe

Two MIT professors, one in the business school one in economics, had a look at three year-old cap and trade program in the European Union. What they found is interesting.

The four take aways from an MIT
press release -

[T]he economic effects-in a macroeconomic sense-have not been large...

Permitting facilities [to] bank (save some of this year's allowance for use next year) or borrow (use some of next year's allowances now and not have them available next year) [has not allowed a company to] postpone their obligations indefinitely

[A]llocating emissions allowances is going to be contentious-and yet cap-and-trade is still the most politically feasible approach to controlling carbon emissions.

[E]verything does not have to be perfectly in place to start up.

Of course the reason the macroeconomic effects have been low is that the cap is still so low. The question left out of this analysis is any comparison of the rate of reduction in CO2 emissions to any external goal. In other words, if you have a deadline for a story, it is excellent to establish that the new word processor you have works, that it powers on, that words get recorded as they are written etc. The missing metric is whether you will meet the deadline at the rate you're writing.

That should be the next area for study.