With the adoption of the Paris Agreement, the world of climate policy has changed, with important implications for the debate on carbon leakage. This report looks at how the risk of carbon leakage changes for different constellations of climate policy targets, how the incentives for countries have changed, and what carbon leakage entails for global emissions under these constellations.

Companies in countries with strong climate protection efforts often perceive these efforts as a competitive disadvantage. The risk, that companies lose market share due to asymmetric climate protection efforts or that new investments in ambitious countries decrease is referred to as "carbon leakage". In this project, Ecologic Institute, Öko-Institut and CE Delft examine the impact of new developments in climate policy on the established carbon leakage debate and what policy measures are needed to deal with these developments.