Carbon Leakage

The EU Emissions Trading System (ETS) is an ecologically sound and economically effective instrument for climate protection. In cep's view, the ETS can only contribute to global climate protection if carbon emissions that are reduced in the EU are not simply moved to third countries (carbon leakage).


In order to avoid carbon leakage - i.e. the relocation, due to emissions costs, of CO2-intensive production to countries with no or only low emissions costs - all globally competing emitters of greenhouse gases must be subject to the same climate policy. This is not currently the case. In its latest study, therefore, cep has drawn up a list of requirements which need to be met in order to avoid carbon leakage.