Carbon Leakage

Carbon leakage occurs when efforts by one country or region to reduce greenhouse gas emissions lead to an increase in emissions elsewhere. For example, if strict environmental policies cause companies to move factories to countries with looser rules, the overall reduction in global emissions might be diminished or negated. This means that efforts to cut emissions in one area can unintentionally result in higher emissions globally, undermining climate change mitigation. Addressing carbon leakage often requires coordinated international policies to prevent such shifts and ensure global emission reductions.