The risk of carbon leakage in global climate agreements
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The risk of carbon leakage in global climate agreements Tobias Nielsen1,4 · Nicolai Baumert2 · Astrid Kander2 · Magnus Jiborn2 · Viktoras Kulionis2,3 Accepted: 3 September 2020 © The Author(s) 2020
Abstract Although climate change and international trade are interdependent, policy-makers often address the two topics separately. This may inhibit progress at the intersection of climate change and trade and could present a serious constraint for global climate action. One key risk is carbon leakage through emission outsourcing, i.e. reductions in emissions in countries with rigorous climate policies being offset by increased emissions in countries with less stringent policies. We first analyze the Paris Agreement’s nationally determined contributions (NDC) and investigate how carbon leakage is addressed. We find that the risk of carbon leakage is insufficiently accounted for in these documents. Then, we apply a novel quantitative approach (Jiborn et al., 2018; Baumert et al., 2019) to analyze trends in carbon outsourcing related to a previous international climate regime—the Kyoto Protocol—in order to assess whether reported emission reductions were offset by carbon outsourcing in the past. Our results for 2000–2014 show a more nuanced picture of carbon leakage during the Kyoto Protocol than previous studies have reported. Carbon outsourcing from developed to developing countries was dominated by the USA outsourcing to China, while the evidence for other developed countries was mixed. Against conventional wisdom, we find that, in general, countries that stayed committed to their Kyoto Protocol emission targets were either only minor carbon outsourcers or actually even insourcers—although the trend was slightly negative—indicating that binding emissions targets do not necessarily lead to carbon outsourcing. We argue that multiple carbon monitoring approaches are needed to reduce the risk of carbon leakage. Keywords Carbon leakage · Paris agreement · Kyoto protocol · Emission outsourcing · Climate policy · Carbon monitoring
Electronic supplementary material The online version of this article (https://doi.org/10.1007/s1078 4-020-09507-2) contains supplementary material, which is available to authorized users. * Nicolai Baumert [email protected] 1
Department of Political Science, Lund University, Box 52, 221 00 Lund, Sweden
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Department of Economic History, Lund University, Box 7083, 220 07 Lund, Sweden
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Institute of Environmental Engineering, ETH Zürich, 8093 Zürich, Switzerland
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IVL Swedish Environmental Research Institute, Nordenskiöldsgatan 24, 211 19 Malmö, Sweden
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T. Nielsen et al.
1 Introduction International trade and climate change policy are intrinsically linked, yet often dealt with in separate silos (Betsill et al. 2015; Bhagwati and Mavroidis 2007). Climate negotiations under the UN Framework Convention on Climate Change (UNFCCC) focus on national climate action and the distribution of responsibilities between countries, but pay little attention to effec
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