The cost-effectiveness of unilateral emission abatement can be seriously hampered by emission leakage. We assess three widely-discussed proposals for leakage reduction targeted at energy-intensive and trade-exposed industries: border tax adjustments, output-based allocation and industry...

The success of any international climate change agreement depends on abatement targets and the incentives for countries to participate. We demonstrate that international emission trading is effective in making headway on both issues despite the assumption that countries choose their permit...