What question did this study set out to answer?

The aim is to evaluate how countries address carbon leakage risks in their carbon pricing policies.

February 16, 2026Open Access

Approaches to Carbon Leakage in Carbon Pricing Policies

Key Points

The aim is to evaluate how countries address carbon leakage risks in their carbon pricing policies.
Overview of approaches taken by Climate Club member countries and other major GHG emitters.
Analysis of measures to tackle carbon leakage within carbon pricing schemes.
Identification of areas for improving cooperation and reducing inefficiencies.
Highlights the importance of addressing carbon leakage to enhance climate action.
Identifies potential inefficiencies in alternative carbon leakage measures.
Suggests cooperation among countries to collectively increase climate ambition.

Abstract

Broad and ambitious climate action is urgently needed since the Paris Agreement’s goals are still out of sight. While globally aligned and joint climate policy measures would be the best solution to avoid carbon leakage, in their absence, alternative measures can address carbon leakage risks. However, they can also result in fragmentation and inefficiencies. This paper provides an overview of how Climate Club member countries and selected other major GHG emitters address carbon leakage risks within their carbon pricing policies, and highlights areas for cooperation to reduce inefficiencies and collectively increase ambition.

Approaches to Carbon Leakage in Carbon Pricing Policies

Key Points

Abstract

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