Abstract: Abstract: The implementation of the Kyoto Protocol would exert great influences on international trade and economy, and carbon leakage is one of the most important conceptions that describe these influences. Researching on this issue will help us to understand the future influences of the Kyoto Protocol better, especially for the interests of China. The issue of carbon leakage not only embodies the conflicts between environment and trade, but also reflects the important political economic nexus involved in international climate system negotiations. This paper introduces the definition of carbon leakage at first, summarizes literatures on the magnitude of leakage rates, regional contribution and important determinants, analyzes empirically the role of climate policies in the relocation trends of energy intensive industries, and finally discusses both benefits and challenges that the carbon leakage would possibly bring for China and gives some suggestions.

Key words: Kyoto Protocol, Carbon Leakage, Energy-Intensive Industry