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climate policy addressing global externalities. The debate is particularly salient in Europe, where the EU Emissions … TradingSystem (EU ETS) covers emissions of many traded sectors. In a first step, we review how carbon leakage and the pollution … introduced by the EU ETS has caused carbon leakage in European manufacturing. We compute trade flows in embodied carbon and value …
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Firms face considerable uncertainty in their regulatory environment, including uncertainty regarding whether and how newly passed policies will be implemented, especially in federated government structures. Although firms can wait until the uncertainty is resolved, they will also lose a...
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