Carbon leakage

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1. Environmental policy - European Union (EU) - regulation.

In the EU context, carbon leakage is the situation where greenhouse gas (GHG) emissions increase in other countries, as a consequence of reductions in GHG emissions and increasingly strict regulation within the EU.

This might result from:

  • EU businesses transferring their domestic production to other countries with looser regulation.
  • Replacing domestic production with imports from other suppliers in those countries.

2. Environmental policy - other jurisdictions - regulation.

Similar consequences in other countries and blocs.

See also