Leakage
An increase in emissions outside a project's boundary caused by the project itself.
Example
Protecting one forest area may shift clearing elsewhere.
The catch
This accounting meaning differs from a physical methane leak.
Related terms
Methane, Abatement cost, Additionality, Baseline scenario, Beyond value chain mitigation, Buffer pool
In more depth
Leakage, explained.
Leakage is the reason a project's own measurements can show success while the atmosphere sees less benefit. Emissions move outside the area being measured. Analysts usually separate activity shifting, where the people or businesses displaced by a project carry on elsewhere, from market leakage, where reduced supply raises prices and encourages new production somewhere else. A protected forest that cuts timber supply can trigger logging in an unprotected one without anyone moving.
Crediting methods handle this by estimating leakage and deducting it from the reductions a project may claim, which means each carbon credit should reflect the net effect. The estimate is hard to make well, because displaced activity is diffuse and rarely measured directly. A wider system boundary helps. Programmes that account across a whole region or country capture shifting within their borders, which makes the result more believable.
Governments face the same problem at larger scale. Carbon leakage happens when carbon pricing in one jurisdiction leads production, and its emissions, to relocate to places with weaker rules. The EU designed its carbon border adjustment mechanism with that risk in mind. When you assess a project, ask where the displaced activity went, how the deduction was calculated and whether anyone checked it independently.