Does unilateral climate change policy cause companies to shift the location of production, thereby creating carbon leakage? In this paper, analyse the effect of the European Union Emissions Trading System (EU ETS) on the geographical distribution of carbon emissions by multinational companies.

Does unilateral climate change policy cause companies to shift the location of production, thereby creating carbon leakage? In this paper, the authors analyse the effect of the European Union Emissions Trading System (EU ETS) on the geographical distribution of carbon emissions of multinational companies.