In the context of impact assessments, we use the term leakage effect to describe situations where measures for improving the situation (e.g. environmental protection) in one location result in a shift of problematic activities to other locations. Leakage effects may partly or fully offset intended positive effects of environmental policies by displacing, rather than alleviating environmental pressures.

Leakage effects gained public attention mainly with regard to a displacement of greenhouse gas emission. The problem of potential “carbon leakage” has been addressed both in policy (European Commission, 2014) and science (Franzen & Mader, 2018; Naegele & Zaklan, 2019).

Leakage effects can also cause Indirect Land Use Changes (ILUC). These are conversions from one land use type into another (such as from forest to cropland) that are caused by changes in the production level of an agricultural commodity in another, often far away location. Lambin & Meyfroidt (2011) present an example of how land zoning for environmental protection may lead to displacement of populations or a stronger reliance on agricultural imports, resulting in land use changes and an encroachment of natural ecosystems elsewhere. Additional forms of leakage effects may exist, such as stricter regulations for pesticide and fertilizer application leading to higher imports of agricultural commodities from countries where regulations are laxer. However, studies addressing this are currently lacking.

The possibility of leakage effects should be considered in the design and evaluation of policies. For impact assessments to be able to detect them, spatial scales must be set wide enough to also capture effects that appear outside the area of policy application.