The EU (which ratified the Kyoto Protocol and thus faces mandatory emission reductions) has reduced energy intensity by only 7.5 % compared to the 15.8% percent reduction achieved by the USA over the 1992- 2001 period. Similarly, the ratio of CO2 emissions per dollar of output has decreased faster in the U.S. than in the EU over the past decade, 15.3% for the USA compared to 13.8% in Europe. By adopting a voluntary approach to emission reductions, the Bush Administration balances multiple policy objectives, including maintaining strong economic growth and enhanced environmental quality. In contrast, economic growth in the EU is weak and unemployment is high - about 10% in recent years.