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Approaches to Carbon Leakage in Carbon Pricing Policies

Broad and ambitious climate action is urgently needed since the Paris Agreement’s goals are still out of sight. While globally aligned and joint climate policy measures would be the best solution to avoid carbon leakage, in their absence, alternative measures can address carbon leakage risks. However, they can also result in fragmentation and inefficiencies. This paper provides an overview of how Climate Club member countries and selected other major GHG emitters address carbon leakage risks within their carbon pricing policies, and highlights areas for cooperation to reduce inefficiencies and collectively increase ambition. Veröffentlicht in Fact Sheet.

Models for the analysis of international interrelations of the EU ETS and of a CBAM - Extended model overview

This report is part of the overall project “Models for the analysis of international interrelations of the EU-ETS and of a CBAM”. It provides an overview of existing models that are in principle capable of representing the key topics of the overall research project: namely, a) the potential “carbon leakage” impacts from “uneven” carbon pricing, b) policies that address this risk, e.g. a carbon border adjustment mechanism (CBAM), and c) more general, key economic impacts of GHG mitigation scenarios with different total global mitigation ambitions. This overview also includes the two models applied in this project - GINFORS-E and GEM-E3. Veröffentlicht in Climate Change | 76/2025.

Models for the analysis of international interrelations of the EU ETS and of a CBAM - Summary

Two types of large-scale models with different modelling philosophies are used to quantify socioeconomic effects in scenarios in which the EU moves forward in climate policy and applies different design options under the EU emissions trading system (ETS) combined with a Carbon Border Adjustment (CBAM). One model, GEM-E3, is a computable general equilibrium model that follows neoclassical theory, while the other model, GINFORS-E, is a macroeconometric model that follows a post-Keynesian approach. The results of both models suggest that an effective CBAM plays a significant role in reducing the risk of carbon leakage. The key results on trade, production and emission effects also show, by and large, little quantitative variation between the two models, in spite of their different philosophies. The overall report consists of four separate reports next to this Summary Report: Veröffentlicht in Climate Change | 77/2025.

Climate Protection Scenarios until 2050 Considering CO₂ Price Differences and Carbon Leakage - Central report

Two types of large-scale models with different modelling philosophies are used to quantify socioeconomic effects in scenarios in which the EU moves forward in climate policy and applies different design options under the EU emissions trading system (ETS) combined with a Carbon Border Adjustment (CBAM). One model, GEM-E3, is a computable general equilibrium model that follows neoclassical theory, while the other model, GINFORS-E, is a macroeconometric model that follows a post-Keynesian approach. The results of both models suggest that an effective CBAM plays a significant role in reducing the risk of carbon leakage. The key results on trade, production and emission effects also show, by and large, little quantitative variation between the two models, in spite of their different philosophies. This Central Report covers the results of the key policy scenarios on the EU-ETS design regarding allocation and the CBAM. It also includes some key sensitivity analyses on trade assumptions, climate policy ambition in major trading partner countries, extension of the CBAM to indirect emissions thereby replacing national schemes for compensating electricity prices from ETS, and (for GEM-E3) on the use of government revenues. Veröffentlicht in Climate Change | 74/2025.

Climate Protection Scenarios until 2050 Considering CO₂ Price Differences and Carbon Leakage - Technical report

Two types of large-scale models with different modelling philosophies are used to quantify socioeconomic effects in scenarios in which the EU moves forward in climate policy and applies different design options under the EU emissions trading system (ETS) combined with a Carbon Border Adjustment (CBAM). One model, GEM-E3, is a computable general equilibrium model that follows neoclassical theory, while the other model, GINFORS-E, is a macroeconometric model that follows a post-Keynesian approach. The results of both models suggest that an effective CBAM plays a significant role in reducing the risk of carbon leakage. The key results on trade, production and emission effects also show, by and large, little quantitative variation between the two models, in spite of their different philosophies. This Technical Report documents firstly how the two models have been harmonised as far as possible in terms of external assumptions on, e.g., global population, GDP development and on energy prices, so that the differences in results in the later, policy related, scenarios are indeed related to model differences, and not simply to different key assumptions. This is followed by exploratory scenario runs that address the impact of the EU moving forward versus the case that global uniform CO 2 prices achieve either a 2 degrees, or a 1.5 degrees climate policy goal. Veröffentlicht in Climate Change | 75/2025.

Shall the CBAM be expanded further downstream? Insights from assessing products along the automotive value chain

The EU's carbon border adjustment mechanism (CBAM) replaces the free allocation in the EU ETS 1 as the main carbon leakage instrument. The study discusses the potential expansion of the CBAM to downstream products. Using the example of products from the automotive value chain (wheels, brakes, crankshafts, forged and flat-rolled primary products), it shows that the CO₂ costs vary greatly depending on the product. The estimates of the carbon costs are complemented with expert assessments from interviews. The study then derives a series of criteria to be considered for the extension of CBAM to downstream products. Veröffentlicht in Climate Change | 50/2025.

Wechselwirkungen zwischen dem EU-Emissionshandelssystem und Energie- und CO₂-Steuern sowie Begleitforschung zur Weiterentwicklung dieser Instrumente

Im Rahmen der Umsetzung des „Fit-for-55“-Pakets der Europäischen Kommission wurden seit 2021 wesentliche Elemente der CO₂-Bepreisung in der EU reformiert und an die verschärften Reduktionsziele für 2030 angepasst. Dieser Abschlussbericht fasst die Ergebnisse eines Forschungsvorhabens zusammen, das dem Umweltbundesamt (UBA) und dem Bundesministerium für Wirtschaft und Klimaschutz (BMWK) eine passgenaue, flexible und wissenschaftlich fundierte Analyse dieser Reformen, konkreter Umsetzungsoptionen und ihrer möglichen sozialen und ökonomischen Auswirkungen geliefert hat. Dazu wurden in zwei Arbeitspaketen (AP) verschiedene wissenschaftliche Produkte erarbeitet. Das erste AP beschäftigte sich mit CO₂-Bepreisung außerhalb des EU-ETS 1 und besonders mit dem neuen EU-ETS 2. Dabei wurden verschiedene Optionen für preisdämpfende Maßnahmen sowie die Mengensteuerung im EU-ETS 2 untersucht. Das zweite AP beschäftigte sich mit dem CBAM. In mehreren Kurzgutachten und Diskussionspapieren wurden verschiedene Teilaspekte des Mechanismus analysiert und offene Fragen sowie mögliche Problemfelder bei der Umsetzung identifiziert.

Evaluierung und Weiterentwicklung des EU ETS im Rahmen der Novellierung der ETS-RL und des European Green Deal mit ökonomischem Schwerpunkt

Im Rahmen des European Green Deal hat die Europäische Kommission (KOM) im Juli 2021 einen Entwurf für die Novellierung der EU-Emissionshandelsrichtlinie vorgelegt. Dieser Entwurf ist unter anderem im Zusammenhang mit der vorgesehenen Ambitionssteigerung der EU-Klimaschutzziele bis 2030 notwendig. Die Verhandlungen hierzu werden sich voraussichtlich bis 2023 ausdehnen. Die Novellierung der Richtlinie wird wesentlich durch eine strukturelle Weiterentwicklung des EU-ETS geprägt sein. Diese umfasst u.a. folgende Bereiche: - Ambitionssteigerung durch Absenkung des Cap, - mögliche Fortentwicklung und potenzielle Neuschaffung von Förderinstrumenten (Innovationsfonds etc.), - Ausweitung des Anwendungsbereichs (zum Beispiel Seeverkehr) und/oder Ergänzung um einen separaten Emissionshandel für die Nutzung von Brennstoffen in anderen Sektoren analog zum deutschen nEHS; - Maßnahmen zur Vermeidung von Carbon Leakage (Weiterentwicklung der Zuteilung und Zusammenspiel mit Grenzausgleichsmaßnahmen). Das Projekt hat einen ökonomischen Schwerpunkt und soll die DEHSt als zuständige Behörde und das BMU als federführendes Ressort in diesem Prozess mit wissenschaftlichen Analysen unterstützen.

Model Output Statistics for CHAM (06674)

DWD’s fully automatic MOSMIX product optimizes and interprets the forecast calculations of the NWP models ICON (DWD) and IFS (ECMWF), combines these and calculates statistically optimized weather forecasts in terms of point forecasts (PFCs). Thus, statistically corrected, updated forecasts for the next ten days are calculated for about 5400 locations around the world. Most forecasting locations are spread over Germany and Europe. MOSMIX forecasts (PFCs) include nearly all common meteorological parameters measured by weather stations. For further information please refer to: [in German: https://www.dwd.de/DE/leistungen/met_verfahren_mosmix/met_verfahren_mosmix.html ] [in English: https://www.dwd.de/EN/ourservices/met_application_mosmix/met_application_mosmix.html ]

Model Output Statistics for ABECHE (64756)

DWD’s fully automatic MOSMIX product optimizes and interprets the forecast calculations of the NWP models ICON (DWD) and IFS (ECMWF), combines these and calculates statistically optimized weather forecasts in terms of point forecasts (PFCs). Thus, statistically corrected, updated forecasts for the next ten days are calculated for about 5400 locations around the world. Most forecasting locations are spread over Germany and Europe. MOSMIX forecasts (PFCs) include nearly all common meteorological parameters measured by weather stations. For further information please refer to: [in German: https://www.dwd.de/DE/leistungen/met_verfahren_mosmix/met_verfahren_mosmix.html ] [in English: https://www.dwd.de/EN/ourservices/met_application_mosmix/met_application_mosmix.html ]

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