The EU is widely viewed as the world leader in climate action, a position it has held for the last few decades. Of course, most member states are too small to make a dent in global greenhouse gas emissions on their own. But as a bloc, they have managed to generate positive policy spillovers, creating a virtuous circle whereby their climate ambitions encourage others to follow suit. Imagine this as a policy flywheel. At first, it takes substantial effort — in the EU’s case, political and diplomatic capital — to get it moving.

Catherine Wolfram highlights three recent developments that underscore why the bloc should maintain its carbon-pricing system.

The EU is widely viewed as the world leader in climate action, a position it has held for the last few decades. Of course, most member states are too small to make a dent in…