International industrial competitiveness, carbon leakage and approaches to carbon pricing (abgeschl.)

Project leader: Dr. Susanne Dröge

This project is convened by Climate Strategies and has been commissioned to SWP.

This project is convened by Climate Strategies and has been commissioned to SWP. Climate Strategies is an academic network organisation focused upon developing and delivering research to meet the needs of international climate change policymaking. It convenes international groups of experts to provide rigorous, fact-based and independent assessment on international climate change policy. To effectively communicate insights into climate change policy, Climate Strategies works with decision-makers in governments and business, particularly, but not restricted to, the countries of the European Union and EU institutions.

Project description:

This project is a follow-up of Tackling Leakage in a World of Unequal Carbon Prices.

Carbon leakage and international competitiveness issues are a key challenge for governments and businesses due to continuing unilateral and mostly uncoordinated climate policy measures around the globe. In addition, industries are coping with the aftermath of global recession that is affecting the structure of individual industries in many countries. Dealing with multiple carbon regimes thus remains amongst the key issues in international climate policy.

The research project addresses three research areas which relate to the current and prospective needs of government policymakers, business decision-makers and other stakeholders.

  1. Analysis for some particular heavy industries. Amongst the sectors for an additional deeper analytical review are refineries, some basic chemicals, and for some regions pulp & paper and glass.

  2. Investment decisions in the light of unilateral carbon pricing and policies to reduce carbon leakage (such as free allocation or border measures). Are there insights regarding the often cited claim that industries are becoming footloose and migrating to pollution havens where climate policy is absent or less stringent.

  3. Changes in the climate and economic policy environment both in the domestic and international arena. This is particularly relevant for the EU and some other countries like Japan or China who are committed to unilateral climate policy action, despite the weak international basis for cooperation at the global level.