A synthesis of unilateral approaches to mitigating emissions leakage under incomplete policies

This article addresses the question of what an individual jurisdiction (or a group of jurisdictions) could do to mitigate the leakage of GHG emissions that results from its (their) own regulation aimed at reducing such emissions. A novel aspect of this work is that it is focused on methods other than those involving the pursuit of environmental agreements with other jurisdictions to reduce leakage. In other words, the focus is on unilateral measures to reduce such leakage. A number of different approaches including the proper selection of the type of policy instrument and policy ramp up, improved targeting of polluting activities, targeting lifecycle emissions and adoption of additional leakage-specific policies that complement the main policy have been suggested in specific yet different policy arenas. There does not, however, appear to be an understanding of the common and distinct features of the different types of responses and the multiple approaches that might be appropriate in any specific policy context. To this end, this article synthesizes and differentiates the different approaches based on whether leakage is being mitigated ex ante or in media res and at the national or provincial level, on the tangibility of policy makers’ efforts to control leakage, on the level of burden placed on regulated polluters, and on the required level of precision in the estimates of leakage.Policy relevanceThis article provides a consolidated summary of a diverse literature on the different ways in which policy makers can address the problem of the leakage of GHG benefits under unilateral policies. A salient aspect of this article is that it focuses on unilateral responses to leakage that are complementary to the pursuit of environmental agreements with other jurisdictions. It identifies the different types of response that might be appropriate under different settings.