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Carbon Leakage, Consumption, and Trade

Referierte Aufsätze Web of Science

Michael Grubb, Nino David Jordan, Edgar Hertwich, Karsten Neuhoff, Kasturi Das, Kaushik Ranjan Bandyopadhyay, Harro van Asselt, Misato Sato, Ranran Wang, William A. Pizer, Hyungna Oh

In: Annual Review of Environment and Resources 47 (2022), S. 753-795


We review the state of knowledge concerning international CO2 emission transfers associated particularly with trade in energy-intensive goods and concerns about carbon leakage arising from climate policies. The historical increase in aggregate emission transfers from developing to developed countries peaked around 2006 and declined since. Studies find no evidence that climate policies lead to carbon leakage, but this is partly due to shielding of key industrial sectors, which is incompatible with deep decarbonization. Alternative or complementary consumption-based approaches areneeded. Private sector initiatives to trace and address carbon emissions throughout supply chains have grown substantially but cannot compensate for inadequate policy. Three main price-based approaches to tackling carbon leakage are potentially compatible with international trade rules: border adjustments on imports, carbon consumption charges, and climate excise contributions combined with emissions trading. We also consider standards and public procurement options to tackle embodied emissions. Finally, we discuss proposals for carbon clubs involving cooperation among a limited set of countries.

Karsten Neuhoff

Head of Department in the Climate Policy Department

Keywords: Carbon leakage, climate policy, embodied emissions, industrial decarbonization, international trade, consumption, equity, climate clubs