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.

China’s 11th Five-Year Plan set a goal to reduce the emission of sulphur dioxide (SO2) by 10% between 2006 and 2010. Stoerk provides the first empirical evaluation of this target.