The finding was based on an analysis of current emissions trading schemes (ETSs) in the European Union (EU), as well as cap and trade systems for other types of emissions that are already in place in the US.

“The European experience confirms that cap and trade systems can be constructed, that markets emerge to facilitate trading, that emissions are reduced efficiently, and that the effects on affected industries are less than predicted,” said Denny Ellerman, the study’s lead author and senior lecturer in the MIT Sloan School of Management.

The study found that the most controversial aspect of the EU’s…