Carbon leakage, relocation, and halo: A framework to understand impacts of China's carbon-energy policy on Asia's energy transitions

Abstract

This chapter aims to conceptualize carbon leakage, relocation, and halos and develop a framework to analyze cross-border economic and environmental consequences of carbon-energy policy through outward foreign direct investment (FDI) in power projects and exports of renewable energy-soured electricity (RES-E) technologies. It revisits the arguments over the concept, research methodologies, and outcomes on pollution heaven, halo, and carbon leakage, conceptualizing carbon relocation and carbon halo on top of these arguments to give definition. Next, the chapter raises the core research question throughout this book: how has China’s carbon-energy policy incentivized outward FDI in coal power and RES-E projects and exports of these technologies; how have these Chinese outward FDI and exports generated energy transitions in host countries, and caused carbon leakage, relocation, and halos; and can regional connectivity be a countermeasure?