Carbon Leakage Along with the Green Paradox Against Carbon Abatement? A Review Based on Carbon Tax

Research background: Insufficient global cooperation in carbon pricing against global warming has the risk of global carbon emissions rise because of carbon leakage. The effect of a carbon tax on the present supply of fossil fuels is also valuable in regard to global carbon emissions.

Purpose: The purpose of this study is to gain more insights into the effects of carbon leakage along with the green paradox on global carbon emissions by reviewing the relevant literature.

Research methodology: We provide the problem linked to carbon leakage and the green paradox in the introduction. Then, the effects of carbon leakage and the green paradox on global carbon emissions are elaborated separately. Finally the mutual effects of carbon leakage and the green paradox are reviewed comprehensively.

Results: It is seen that various factors like interest rates, fossil fuel extraction costs, the fossil fuel reserves to be discovered in the future and carbon tax incidence are equally important determinants in regard to global carbon emissions.

Novelty: This study provides an insight into the mutual effects of carbon leakage and the green paradox on global carbon emissions by reviewing the primary literature in the field.