emissions leakage, definition of

This is a concept often used by policymakers in reference to the problem that emissions abatement achieved in one location may be offset by increased emissions in unregulated locations. Such leakage can arise, for example, in the short term as emissions abaters reduce energy demand or timber supply, influencing world prices for these commodities and increasing the quantity emitted elsewhere; and it can arise in the longer term, for example, as industries relocate to avoid controls.