Managing solid waste to co-control carbon and nitrogen leakage in China

The European Union introduces a cross-border carbon policy, the Carbon Border Adjustment Mechanism (CBAM), to prevent carbon leakage. This study aims to investigate the short-term market reaction of Chinese listed firms in industries covered by the EU CBAM to its official enactment on May 17, 2023. This research examines whether investors perceived the CBAM as a risk or an opportunity. Using an event study methodology, we analyze the cumulative abnormal returns (CAR) for a sample of affected firms over a three-day event window surrounding the enactment date. The results reveal a significant positive market reaction, with a cumulative average abnormal return of 0.60%, primarily driven by a strong 0.91% positive return on the enactment day itself. This finding suggests that investors, on aggregate, interpreted the CBAM not as a punitive burden but as a regulatory shock that will enhance the short-term valuation of Chinese exporters.

Carbon leakage in a world of asymmetric carbon prices: Evidence from emissions embodied in trade and effective carbon prices.

Carbon leakage in production networks under asymmetric climate policies

Whether the hybridization of polystyrene, polyethylene, and polypropylene microplastics impacts aquatic carbon leakage from water hyacinth: A case study considering per(poly)fluorocarboxylicacid cocontamination

Export Pattern Analysis of South Korea’s Steel Sector Uunder the EU CBAM: Trade Diversion, Carbon Leakage Risks, and Challenges to Environmental Legitimacy

As global carbon neutrality ambitions intensify, cross-regional embodied carbon transfers via inter-city trade increasingly pose complex governance risks and crises. Employing an environmentally extended multi-regional input-output (EE-MRIO) framework integrated with evolutionary game theory and multi-agent network analysis, this study critically investigates strategic governance responses to these risks within hierarchical administrative contexts. We introduce a refined carbon accounting approach that explicitly merges production-based and consumption-based emissions, significantly enhancing the precision and fairness of accountability mechanisms. Using multiyear data on 313 Chinese cities, we identify critical thresholds in carbon pricing that decisively shape cooperative and non-cooperative behavior in carbon mitigation. Furthermore, network structure profoundly affects governance outcomes-small-world topologies rapidly diffuse cooperative norms, whereas scale-free networks exacerbate vulnerabilities to strategic defection and systemic risk. This research offers robust theoretical advancements by clarifying the roles of strategic interactions, network topologies, and administrative incentives in shaping embodied carbon governance. Practically, we provide actionable policy interventions for mitigating systemic inefficiencies and resolving equity challenges linked to carbon leakage, trade-induced risks, and regional crises. By combining theoretical rigor with policy-oriented insights, our integrated methodological approach sets a precedent for effective and equitable climate risk governance, broadly adaptable beyond China's specific context.

Since the early 2000s accelerated industrialization, urban population growth, and increased energy consumption have led the People’s Republic of China (PRC) to become the world’s largest source of greenhouse gas (GHG) emissions, which continue to rise. This has created a necessity for transitioning to a low-carbon economic development model, especially under international pressure and the country’s ambitious goal of achieving carbon neutrality by 2060. A distinctive feature of China’s current climate policy is its focus not on absolute emission reductions, but rather on reducing emissions per unit of gross domestic product (GDP), i.e., lowering the carbon intensity of the economy. The aim of this study is to analyze the evolution of China’s climate policy and assess the effectiveness of market-based GHG emission regulation tools, such as emissions trading systems and carbon credit mechanisms, in the context of reducing the economy’s carbon intensity. The research is based on an analysis of government documents, data on carbon market functioning, and scientific literature. Comparative analysis and statistical modeling were employed to evaluate emission dynamics and the effectiveness of climate policy instruments. The analysis shows that in recent years there has been a decline in the ambition of climate policy; however, carbon markets demonstrate positive results, although they face several challenges and limitations: insufficient data transparency, low allowances prices and liquidity, potential carbon leakage, and a shortage of carbon credits. The concluding part of the study emphasizes that the reduction in carbon intensity may be related not only to state efforts, but also to the Kuznets curve, according to which GHG emissions begin to decline after reaching a certain level of economic development. To achieve the long-term goal of carbon neutrality in the PRC, further improvement of climate policy is necessary, including replacing targets for reducing emission intensity with limits on absolute emission volumes, as well as strengthening control within ETSs and carbon crediting mechanisms.

Abstract The risk of ships circumventing domestic climate regulations can increase greenhouse gas emissions while negatively impacting port competitiveness and trade. This article identifies regulatory options to effectively mitigate that risk and highlights the main trade-offs that each option may involve. It does so by combining (i) a qualitative law and economics review of shipping companies’ evasion possibilities and incentives, and (ii) a comparative legal study of maritime decarbonization policies in the European Union and the United States. The findings suggest that maritime carbon leakage can materialize in four main forms, or in combinations thereof: reflagging, port evasion, ship substitution, and speed increase. Port states can mitigate it with regulatory countermeasures that limit evasion options, increase the costs of evasion, and/or decrease the costs of compliance for shipping companies. Carbon leakage countermeasures may take the form of amendments to the regulation that generates the risk of carbon leakage, complementary domestic policy measures, or synergies with foreign and international climate regulations. Almost all identified carbon leakage mitigation options imply potentially significant trade-offs for the regulating jurisdiction.

This article focuses on the climate change policies that are needed to reduce the greenhouse gas emissions of the ultra-rich, primarily from superyachts, private jets, mega-mansions, and high-emission road vehicles. These are all goods for which demand is inelastic and therefore difficult to curb with Pigouvian policies. The article proposes a comparative analysis of the three main luxury-focused mitigation policies discussed in the literature: bans, luxury carbon taxation and progressive carbon taxation. The analysis is based on six normative and non-normative criteria: emissions justice, expressive justice, social efficiency, the non-frustration of legitimate expectations, administrative feasibility and prevention of carbon leakage. The first part of the article discusses how each of these criteria is relevant to an analysis of mitigation policies targeting the emissions of the ultra-rich. The second part examines each luxury-focused mitigation policy against all six criteria and assigns them a score. The third section briefly discusses the results of this comparative analysis.

ABSTRACT Adopted in 2023, the Carbon Border Adjustment Mechanism (CBAM) is a significant component of the European Union’s ambitious decarbonization strategy under the European Green Deal. This article questions the output effectiveness of the CBAM in achieving its stated objective, prevention of carbon leakage, while demonstrating its impact effectiveness as an instrument for advancing the global diffusion of carbon pricing. Empirical evidence for carbon leakage remains sparse, and implementation challenges might limit the capacity of the CBAM to counteract leakage even where it occurs. Nonetheless, the CBAM has already demonstrated a powerful spillover effect by incentivizing the acceleration of carbon pricing roadmaps across EU trade partners, suggesting that trade-related climate measures can effectively encourage global climate action. As the EU navigates the complexities of operationalizing the CBAM, it must balance several tradeoffs to maintain this important spillover effect. If successful, the CBAM could catalyze a virtuous cycle of carbon pricing adoption, reinforcing its potentially pivotal role in the EU’s toolbox to manage the environment-trade nexus.

Untargeted metabolomics analysis in tolerant and susceptible landraces of rice under sodicity stress.

Downstream carbon leakage from upstream carbon tariffs: Evidence from trade tariffs

The European Union’s Carbon Border Adjustment Mechanism (CBAM), as part of the Fit for 55 package, introduces a carbon pricing policy for imports from carbon-intensive sectors to mitigate carbon leakage and level the playing field in global trade. This article analyses the potential of CBAM to promote fairness and transparency in climate policy, both within and beyond the EU. We examine its integration with the EU Emissions Trading System (EU ETS), analyses the complementarity of both systems, evaluate its Monitoring, Reporting and Verification (MRV) system, and present a multi-criteria regional comparison based on environmental, circular, and social standards. The steel sector serves as a case study to illustrate economic implications and the effectiveness of carbon pricing models. Our findings suggest that while CBAM can reduce emissions and encourage innovation, its fairness depends on careful implementation, support mechanisms for developing countries, and continuous alignment with international climate goals

Abstract Climate smart forestry (CSF) practices are widely recognized as efficient natural climate solutions. However, leakage accounting for these practices often relies on limited analysis and ad hoc reasoning, leading to integrity concerns and underinvestment in CSF. This study proposes a data-intensive, dynamic economic-ecological modeling approach to estimating regional CSF leakage, with global applicability. Results show how leakage varies by CSF activity, location, forest type, timeframe, and implementation rate. Critically, we show that widely cited harvest leakage estimates ignore complex forest dynamics and are a poor proxy for the metric most applicable to CSF implementation: carbon leakage. While harvest leakage is nearly always positive, our results demonstrate that some project designs can result in beneficial carbon spillovers, or negative carbon leakage. These results improve the evidence base for robust leakage quantification in CSF-based projects, enabling more accurate accounting and thereby ensuring credible climate benefits. These results are relevant in a carbon markets context, where robust leakage accounting would help safeguard the credibility of ecosystem service payments, but are also applicable to traditional, non-carbon markets conservation projects seeking to quantify carbon mitigation impacts.

A substantial amount of literature investigates environmental regulations and their effect on competitiveness. This often leads to a comparison of the two competing hypotheses: the pollution haven hypothesis and the Porter hypothesis. The later suggests that environmental regulations can positively affect country level competitiveness through green research and development, while the former proposes that environmental regulations negatively affect competitiveness through higher production costs. In this paper, we argue that the comparison between these two hypotheses should not only be limited to competitiveness alone but should also include a focus on carbon leakage. We use a two-area stock–flow consistent macroeconomic model calibrated to match key variables for the Danish economy. We incorporate the effects of both the pollution haven and Porter hypotheses within the model. As an environmental regulation is implemented in the Danish economy, we find an immediate negative effect on competitiveness, but as the innovational process is allowed time to play in, as suggested by the Porter hypothesis, the effect on competitiveness turns positive. Furthermore, we find negative carbon leakage rates when the effects of the Porter hypothesis are included together with the pollution haven hypothesis, contradicting the quite large positive estimates found for small open economies in the current literature. We find that the negative carbon leakage rates are a result of including the empirically validated effects of the Porter hypothesis, which are excluded in the current literature.

The European Union (EU) Carbon Border Adjustment Mechanism (CBAM) offers a practical solution to prevent carbon leakage, and its success has sparked discussions about implementing similar regulatory mechanisms in other countries. These discussions have been limited to the adoption of EU-style CBAM in developed countries, overlooking the significant carbon leakage challenges faced by highly industrialized developing countries (HIDCs). This article argues that EU-style CBAMs are equally essential in HIDCs to achieve carbon neutrality and emphasizes the role of WTO law in facilitating their international adoption. It explores the motivations for HIDCs to implement such mechanisms and analyses how WTO law can support their dissemination, contributing to global climate governance. The key contribution of this article is its pioneering exploration of the potential of establishing EU-style CBAMs in HIDCs and the role of WTO law in driving this regulatory shift. Additionally, it addresses the application of the principle of common but differentiated responsibilities (CBDRs) in potential CBAM-related disputes, offering a fresh perspective that complements existing research on the EU CBAM’s compliance with WTO rules.

Global forest carbon leakage and substitution effect potentials: The case of the Swedish forest sector.

Regulatory game model of carbon leakage collusion: Prospect theory and verification agency dynamics

ABSTRACT Climate change is reshaping forest composition in India’s Himalayan region, leading to significant ecological challenges. In particular, the replacement of oak forests, valued for their ecological and community benefits, with fire-prone pine species has resulted in increased forest fires, carbon leakage, flood risk, and the degradation of vital ecosystem services. This transition creates cascading risks, where greater fire vulnerability also heightens flood susceptibility. This study aims to examine how market-based tools, including green bonds and payments for ecosystem services (PES), can support Uttarakhand’s forest-dependent communities in managing these interrelated risks. It analyzes how community forest managers might utilize green bonds to support conservation and restoration efforts, thereby enhancing carbon sequestration, improving streamflow, reducing surface runoff, and mitigating fire hazards. Results indicate that early adoption of green bonds and PES can discourage unsustainable oak harvesting and encourage the restoration of degraded lands, ultimately reducing the risk of cascading disasters. Furthermore, the presence of linked hazards tends to motivate greater conservation investment. However, when both fire and flood risks are high, communities may undervalue future benefits, resulting in weaker conservation efforts. These findings highlight the critical role of early, well-targeted financial incentives in building long-term resilience.