Spectre of carbon leakage thrives on financial crisis

The threat of European industry deserting the continent for distant climes with looser carbon constraints is looming ever larger in EU lawmakers’minds. Sonja van Renssen investigates the hot political potato of carbon leakage.

In these times of financial turmoil, there is a desire to batten down the hatches and protect Europe’s economy. This is not an ideal time to be negotiating a long-term climate change policy.

British economist Nicholas Stern warned that unchecked climate change could cost the world up to 20 per cent of GDP per year – more than the bank bailout packages being agreed by the US and EU.

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