The editors of The Economist think that the U.S. can learn from the Europe’s mistakes with its cap and trade system for curbing carbon emissions.  For The Economist, it is simply a matter of “Get the price right.” 

The editors admit in this paragraph that the EU system is not a
based on economic principles, but on a political “cap and trade”
bargaining system, as it would be in the US if we ever adopted such a
foolish policy.

 The commission has made some compromises in order to get everybody to
buy in to this reform. Energy security is getting attention because of
the East’s fear of Russia. Bones are being thrown to Denmark’s wind
industry, Germany’s solar industry and everybody’s farm lobby through
tough targets for renewables and biofuels. The result is a bit of a
dog’s dinner (see article). But the core of the plan?a reformed ETS, producing a higher carbon price?is likely to survive.

Let’s hope they read some Hayek and/or the whole system collapses on
its own as suggested by this evaluation of political reality.

 Still, while Europe has a carbon price and the rest of the world does
not, there is a cost. If the rest of the world follows where Europe
leads, that temporary price will be worth paying. If it doesn’t, it
won’t; and Europe will eventually give up trying to cut its emissions.

Cross listed on www.environmentnc.com