Int. J. Global Warming, Vol. 1, No. 4, 2009 405 Unilateral climate change mitigation, carbon leakage and competitiveness: an application to the European Union Terry Barker* and S. Şerban Scrieciu Cambridge Centre for Climate Change Mitigation Research (4CMR) Department of Land Economy University of Cambridge, UK E-mail: tsb1@cam.ac.uk E-mail: sss38@cam.ac.uk *Corresponding author Abstract: The setting of binding targets for CO 2 emission reductions for 2020 by the European Union (EU) alone has led to concerns that unilateral climate change mitigation may not only hamper the union’s competitiveness, but also result in carbon leakage. The paper explores these claims through the deployment of a dynamic, nonlinear, macro-econometric simulation called the Energy-Environment-Economy (E3) Model at the Global Scale (E3MG). In contrast to the generally held view, we argue that overall EU competitiveness may improve. We also argue that unilateral action may be effective in reducing global emissions relative to a no-climate-change-action scenario, although the reduction is very small. Keywords: unilateral climate action; global warming; leakage; competitiveness. Reference to this paper should be made as follows: Barker, T. and Scrieciu, S.Ş. (2009) ‘Unilateral climate change mitigation, carbon leakage and competitiveness: an application to the European Union’, Int. J. Global Warming, Vol. 1, No. 4, pp.405–417. Biographical notes: Dr. Terry Barker is the Director of 4CMR, UK. He is also the Chairman of Cambridge Econometrics, a company applying the results of modelling research for business and government. He was a coordinating lead author for the IPCC’s Fourth and Third Assessment Reports working on mitigation. His research interests include induced technological change and the new economics of climate change, systematic modelling of policies to achieve climate stabilisation, the effects of global warming on energy demand, and real carbon prices and long-term economic growth. Dr. S. Şerban Scrieciu is a Senior Research Associate at 4CMR, UK. He has been working on the new economics of climate change and the modelling of mitigation policies at the European and global levels. This involves a whole-systems interdisciplinary approach to the climate change issue with an emphasis on dynamics, complexity, uncertainty and institutional interactions. He has also written on economics, ethics and climate change, land-use change and climate mitigation, economic drivers of deforestation, the limitation of CGE models for sustainability impact assessment, and rural and other development-related issues. Copyright © 2009 Inderscience Enterprises Ltd.