carbon leakage and international trade
Carbon leakage refers to the situation where efforts to reduce carbon emissions in one country inadvertently lead to an increase in emissions in another country. This occurs through the shifting of economic activities, such as production or manufacturing, from countries with strict climate policies to countries with laxer regulations, thus potentially undermining global carbon reduction efforts. International trade plays a crucial role in carbon leakage as it enables the relocation of carbon-intensive industries to countries with weaker environmental standards.
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