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Carbon leakage: pollution, trade or politics?

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  • Gabriela Michalek
  • Reimund Schwarze

Abstract

In recent years, carbon leakage has attracted widespread attention from both environmental researchers and a broader public. Despite its popularity, there has been some confusion around the concept of carbon leakage, resulting from very different and sometimes imprecise definitions of a phenomenon that can be calculated using different, outcome–relevant methods. The aim of the present article is to bring clarity to this research field, to classify available definitions and to offer specific recommendations for good practice. In particular, we discuss and compare different understandings of carbon leakage and the methodologies used to calculate them. Our analysis highlights crucial differences with respect to diverse research purposes and points out shortcomings and potential problems that may, in extreme cases, create policy-relevant grey areas. Copyright Springer Science+Business Media Dordrecht 2015

Suggested Citation

  • Gabriela Michalek & Reimund Schwarze, 2015. "Carbon leakage: pollution, trade or politics?," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 17(6), pages 1471-1492, December.
    • Handle: RePEc:spr:endesu:v:17:y:2015:i:6:p:1471-1492
    DOI: 10.1007/s10668-014-9616-8
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    3. Gabriela Michalek & Georg Meran & Reimund Schwarze & Özgür Yildiz, 2015. "Nudging as a new 'soft' tool in environmental policy. An analysis based on insights from cognitive and social psychology," Discussion Paper Series RECAP15 21, RECAP15, European University Viadrina, Frankfurt (Oder).
    4. Ernst, Anne & Hinterlang, Natascha & Mahle, Alexander & Stähler, Nikolai, 2022. "Carbon pricing, border adjustment and climate clubs: An assessment with EMuSe," Discussion Papers 25/2022, Deutsche Bundesbank.
    5. Fan, Xiaojia & Wu, Sanmang & Li, Shantong, 2019. "Spatial-temporal analysis of carbon emissions embodied in interprovincial trade and optimization strategies: A case study of Hebei, China," Energy, Elsevier, vol. 185(C), pages 1235-1249.
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    7. Ernst, Anne & Hinterlang, Natascha & Mahle, Alexander & Stähler, Nikolai, 2023. "Carbon pricing, border adjustment and climate clubs: Options for international cooperation," Journal of International Economics, Elsevier, vol. 144(C).

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