A well-done policy? Examining carbon leakage in the global meat industry
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2025-06-30
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en
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This research examines the existence of carbon leakage in the global meat industry based on 34 countries between 2000 and 2018. To do this, three fixed-effects models are estimated in combination with consumption- and production-based Green House Gas accounting to find that an increase of one point in environmental policy stringency reduces home-country meat-production emissions by 2.7 % without having significant impact on demand-based consumption emissions. Conversely, Environmental Policy Stringency raises trade-partner-country production-based emissions by 14 %. Combined, these models give a clear indication of carbon leakage, since domestic Green House Gas emissions decline but simultaneously make trade-partner country emissions increase. Persistence tests confirm that these impacts endure for more than three years. To deal with endogeneity issues, a shift–share instrumental variable approach was taken, which raises the estimates to a 9–10 % domestic reduction and a 25 % increase in partner-country emissions. These results show that without coordinated global action, uncoordinated regulation increases the risk of offshoring, rather than actually lowering global emissions.
Keywords: carbon leakage, emission accounting, weight-matrix, global cooperation, environmental policy stringency.
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Faculteit der Managementwetenschappen