Carbon leakage in climate policy

Climate change is a global issue, while climate targets usually are set on a regional (EU) or national (Swedish) level. To design an effective national or regional climate policy, it is important to analyse the impact the policy has on global greenhouse gas emissions. National and regional measures carries the risk of carbon leakage, i.e. increased emissions in countries unaffected by the policy measures, which could diminish the efficiency of the policy.

The project illustrates elements affecting the risk of carbon leakage from cost-increasing climate policy in agriculture in Sweden and in EU. First, we discuss elements affecting the risk of carbon leakage based on existing research. Then we analyse to which degree carbon leakage follows from different regional and global carbon taxation measures, using the simulation model CAPRI, in order to quantify the differences between global and regional policy instruments. The project will be completed in 2022.

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