Few policies have done more to combat climate change than the European Union’s emissions trading system. By putting a price on carbon dioxide — currently about €70 per metric ton — it has given companies throughout the bloc a powerful incentive to invest in going green.

Europe’s leaders should stand by it — and improve it — rather than bowing to industry pressure to walk away from it.

Cap-and-trade systems, in which the government sets the quantity of allowable emissions and the market determines the price, have proved effective. The EU’s system is the world’s largest: The greenhouse gas output of covered companies has roughly halved since its inception in 2005 — a reduction of about 1 billion metric tons annually, far more than similar systems elsewhere.

The system is also helping to strengthen the EU’s strategic independence from major fossil fuel producers, including Russia. And it is generating more than €40 billion in annual revenue that benefits EU nations. Some of that money,........

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