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A new study has found that the European Union's cap-and-trade system is not only effective at reducing greenhouse gas emissions, it's actually helping the EU's economy, Bloomberg reports.
According to a study published in the journal Science Advances, the EU's emissions-trading system, or EU ETS, encourages companies to switch away from carbon-intensive technologies and toward green ones.
In fact, the system accounts for more than half of the EU's greenhouse gas emissions and is the first and largest market in the world for carbon dioxide emissions.
The study found that companies that switch away from carbon-intensive technologies see their emissions drop by 21.4% over a 10-year period, while those that invest in green technologies see their emissions drop by 21.1%, Bloomberg reports.
The study also found that firms in countries that invest in green technologies see their emissions drop by 21.4% over the same period.
"Our central hypothesis posits that a sound institutional framework fostering innovation and technology investment positively impacts firms, as well as the ability of skilled labor to reduce greenhouse gas emissions," the study's lead author says in a press release.
While the study found that the EU's cap-and-trade system is effective at reducing greenhouse gas emissions, it also