Policy makers have long been conscious of the consequences of environmental degradation and the COVID-19 pandemic has further raised and renewed awareness of the inherent fragilities of our environment. Yet, their ambition to address environmental challenges such as climate change, pollution and biodiversity loss has often been held back by the perceived immediate costs of more stringent environmental policies on people and firms. Businesses and policy makers alike fear that differences in the stringency of environmental policies across countries would negatively affect the competitiveness of firms located in the most ambitious regions. Pollution-intensive production would shift towards countries or regions with less stringent regulations, altering the location of industrial production and the subsequent international trade and investment flows – and potentially curbing the environmental gains. These fears are particularly apparent in the case of climate change mitigation, where a large gap exists between globally stated ambitions – as laid out in the 2015 Paris Agreement – and the climate policies actually adopted around the world.