Carbon pricing without bite?: new evidence on industry compensation raises red flags

More than a quarter of global carbon emissions are now covered by some form of tax or trading system. However, political concerns about competitiveness and carbon leakage continue to shape policy design, with many governments offering compensation to energy-intensive firms to shield them from indirect carbon costs. The authors of this commentary emphasise that how we compensate matters and propose approaches governments can take to move to more targeted, conditional support that aligns with long-term decarbonisation goals.