Amid the media’s elation over the United Nations climate deal reached in Paris on Dec. 12, one significant outcome has been overlooked. The European Union failed to achieve its main objective, namely that the agreement adopt carbon-dioxide mitigation commitments that are “legally binding on all parties.”

While this may appear to be a major setback, it liberates Europe from the restrictions of the Kyoto Protocol—which runs out in 2020—and opens the way for more flexible and less damaging policies.

During the Paris negotiations, European Climate Commissioner Miguel Arias Cañete warned that the EU “cannot make the mistake we made in Kyoto” where “all the big emitters were outside the legally binding agreement.” For Europe, the Kyoto Protocol has forced EU states to adopt unilateral, and disastrously costly, decarbonization policies. With their manufacturers rapidly losing ground to international competition, governments are increasingly concerned about the threat high energy prices pose to Europe’s industrial base.

The economic damage of unilateral climate policy is now widely acknowledged. In September 2014, then-EU Energy Commissioner Günther Oettinger warned that “If there is no binding commitment from countries such as India, Russia, Brazil, the U.S., China, Japan and South Korea, whose governments are responsible for some 70% of global emissions,” it would be a mistake for EU states to bind only themselves. “If we are too ambitious and others do not follow us, we will have an export of production and more emissions outside the EU.”

EU leaders followed Mr. Oettinger’s prudent counsel. While the 28-nation bloc offered to cut carbon emissions by 40% below 1990 levels by 2030, its pledge, announced in October 2014, was and remains conditional on all major emitters adopting legally binding targets.