Beyond carbon pricing: How different climate policies affect carbon leakage through trade in General Energy News 06/02/2026 A central concern in the climate policy debate is whether ambitious mitigation efforts simply shift emissions abroad. This column addresses this concern by empirically estimating carbon leakage rates and their drivers across a wide range of climate policy instruments, countries, and sectors. Leakage rates are moderate overall but considerably higher in small open economies and carbon-intensive sectors. Market-based instruments, such as carbon taxes, raise imported emissions through higher and dirtier imports, while regulations and technology support policies result in cleaner imports. These results highlight the potential of well-designed climate policy mixes to limit leakage and support global decarbonisation. Existing evidence on carbon leakage is mixed. Early ex-post studies of carbon pricing typically found little evidence of leakage, largely because of low carbon prices and generous compensation schemes (Venmans et al. 2020, Dechezleprêtre et al. 2022). As carbon prices have risen, more recent empirical work, such as Teusch et al. (2024), has found an average leakage rate of 13% across the cement and steel sectors. Ex-ante modelling studies have long projected meaningful leakage rates, with computable general equilibrium (CGE) models frequently estimating effects of 5–30%. Studies of policies beyond carbon pricing have yielded even more heterogeneous conclusions. Some reported moderate leakage linked to cross-country energy price differences, while others identified no leakage or even negative leakage effects, including evidence that climate legislation abroad reduces domestic emissions (Misch and Wingender 2024, Eskander and Fankhauser 2023). Against this backdrop, our analysis provides novel estimates of carbon leakage rates for 14 manufacturing sectors, 49 countries, and a broad set of climate policy instruments, employing a unified empirical framework (Hemmerlé et al. 2025). Using a gravity model with international and domestic trade and emissions flows, we estimate how unilateral increases in domestic climate policy stringency affect imported emissions, import volumes, and the carbon intensity of imports relative to their domestic counterparts. Crucially, we distinguish the effects of market-based (e.g. carbon taxes), non-market-based (e.g. regulations), and technology-support measures (e.g. subsidies) – each of which may shape carbon leakage in distinct ways. Climate policy stringency is rising and becoming more heterogeneous Climate policy stringency has increased in recent years, but not uniformly across countries. We track these developments using the OECD Climate Actions and Policies Measurement Framework (CAPMF) – the most comprehensive harmonised database of climate policy stringency available to date – which scores 56 policy instruments across 49 countries on a 0–10 scale. To capture the stringency of countries’ overall mitigation policy mix, we construct a composite indicator at the country-year level by averaging the scores across policy instruments. This composite indicator shows that countries with already stringent policies in 2010 strengthened their policies the most by 2020. Stringency has also risen across the three CAPMF policy subindices – market-based, non-market-based, and technology-support instruments – along with a widening dispersion. As countries move forward with different mitiga