T
he European climate strategy, built mainly on unilateral emissions cuts, has become politically fragile and increasingly hard to defend economically. It concentrates visible costs at home, while the climate benefit depends on others following. In February, comments by German Chancellor Friedrich Merz, Italy's Prime Minister Giorgia Meloni and other leaders about revising or delaying the European Union's Emissions Trading System (ETS) helped drive benchmark carbon prices down in Europe.
Across the Atlantic, President Donald Trump's Environmental Protection Agency has finalized the repeal of the 2009 "endangerment finding" that underpins federal greenhouse-gas regulation. Public support for ambitious climate policy is faltering. Selfishness may turn out to be more contagious in international climate policy than altruism.
As three economists from Europe and the United States, we believe the right response to these pressures is to reorient European climate policy from the focus on its own carbon footprint toward catalyzing international cooperation. Climate cooperation can dramatically reduce the costs of putting national industry at a competitive disadvantage and at the same time dramatically increases the effectiveness of climate action.
