Companies are switching markets to avoid carbon taxes, not cleaning up production

The European Union's new carbon border tax is making Turkish manufacturers export fewer carbon-intensive goods to the EU. Instead, these companies are sending those same goods to countries outside the EU. This means the tax is shifting pollution, not reducing it, at least in the short term.

Governments assumed that carbon taxes would force companies to invest in cleaner production. This paper shows that, at least initially, companies are just finding new customers for their dirty products. This makes it harder to actually reduce global emissions, as the pollution just moves somewhere else.