Over in the Financial Times today, Fiona Harvey gets a sneak peek at a new International Energy Agency report, which finds that worldwide carbon-dioxide emissions have undergone a "significant decline" this year—shrinking 2.6 percent, the steepest CO2 drop in the last four decades. Steeper even than the drop after the OPEC oil crisis in the late '70s. Okay, well, no kidding, there's a severe recession going on. Industrial output is declining. What'd we expect?

Ah, but wait: What's surprising here is that the IEA argues that one-quarter of the CO2 drop was actually a result of government policies. The report singles out the EU's cap-and-trade system (which is finally starting to clamp down after some early stumbling); U.S. fuel-economy standards for vehicles; and China's smorgasbord of energy-efficiency policies. In fact, this is the first year that regulations have actually made a significant dent in carbon-dioxide emissions, and the IEA argues they would've had an effect even in the absence of a recession.

So now Fatih Birol, the chief economist of the IEA, is arguing that the current recession might actually make it "much less difficult" to make the carbon cuts many scientists have deemed necessary to avoid drastic climate change. After all, we're already a good chunk of the way there. The Energy Information Administration, for example, recently forecast that the United States would be a whopping 8.5 percent below 2005 emission levels by the end of 2009, which means we'd already be halfway toward the goal in the House climate bill—17 percent below 2005 levels by 2020—long before the thing even gets enacted.

On the flip side, it's also possible that the recession could undermine a cap-and-trade approach if Congress isn't watchful. Here's what I mean: The way the cap works is that Congress sets an overall limit on carbon pollution for each year and then doles out a corresponding number of pollution credits. But if you dole out far more permits than businesses need—because, say, a recession shrunk real emissions far below the cap you set—then the price of carbon permits will plunge to rock-bottom levels, and companies won't have any incentive to make any changes. This is exactly what happened in the early days of the E.U.'s Emissions Trading System. So there's a case to be made for tightening the 2020 targets in the climate bill and setting a floor on carbon prices—something Barbara Boxer appears to be considering right now for the Senate climate bill.