This paper empirically investigates the effect of the European Emission Trading Scheme (EU ETS) on cross-country investments. To avoid carbon leakage, the scheme allocates a number of free allowances to firms at risk of relocating investments in areas outside the EU ETS. To study this problem,...

The EU's Emission Trading Scheme (EU ETS) has been shown to have reduced emissions in the participating countries and industries since its adoption in 2005. However, there is less evidence on the shifting of production outside EU to avoid emission controls. We study this so-called carbon leakage...

This study investigates the causal effect of the EU Emissions Trading System (EU ETS) on firms' holdings of fixed assets as an early indicator of industrial relocation, exploiting installation level inclusion criteria of the regulation. To single out companies with particularly low relocation...

Carbon leakage is an issue of major interest in both academic and policy debates about the effectiveness of unilateral climate policy addressing global externalities. The debate is particularly salient in Europe, where the EU Emissions TradingSystem (EU ETS) covers emissions of many traded...

Carbon leakage is of interest in both academic and policy debates about the effectiveness of unilateral climate policy, especially in Europe, where the EU Emissions Trading System (EU ETS) affects many traded sectors. We review how the literature identifies leakage and the pollution haven...