The COVID-19 pandemic has highlighted the importance of global value chains for the world economy, as well as for low- and middle-income countries' growth prospects. But the crisis has also highlighted the role GVCs can play in accelerating the net-zero transition.
BEIJING – Clogged ports, long shipping delays, and skyrocketing transportation costs are all evidence of the havoc COVID-19 is continuing to wreak with global value chains (GVCs). Firms are reconsidering where to locate (or relocate) production, whether and how much redundancy their operations need, and which inventories to hold as a buffer against future shocks. The effects are rippling through the global economy, creating additional uncertainty and slowing the recovery. Moreover, with policymakers currently in Glasgow for the United Nations Climate Change Conference (COP26), there is increasing pressure to decarbonize production and transportation along GVCs.
BEIJING – Clogged ports, long shipping delays, and skyrocketing transportation costs are all evidence of the havoc COVID-19 is continuing to wreak with global value chains (GVCs). Firms are reconsidering where to locate (or relocate) production, whether and how much redundancy their operations need, and which inventories to hold as a buffer against future shocks. The effects are rippling through the global economy, creating additional uncertainty and slowing the recovery. Moreover, with policymakers currently in Glasgow for the United Nations Climate Change Conference (COP26), there is increasing pressure to decarbonize production and transportation along GVCs.