GVCs and

Climate
Change:
A Golden
Opportunity

Miguel A. Lazo
AGENDA

▰ Introduction
▰ Global Value Chains (GVCs)
▰ Climate Change
▰ Good Practices
▰ References
 “
We are the first generation to be
able to end poverty, and the last
generation that can take steps to
avoid the worst impacts of climate
change.
Future generations will judge us
harshly if we fail to uphold our
moral and historical responsibilities

” Ban Ki-moon
Former UN Secretary General
 INTRODUCTION
The growth of international trade and the
expansion of global value chains (GVCs) over
the last 30 years have had remarkable effects on
development and in
the environment. Moreover,
during recent years scientists
have could collect evidence of
changes in temperature, rainfall
and other weather variables.
This data suggests that over the
period 1880 to 2012 the average
world temperature increased
by 0.85º Celsius.
 GLOBAL VALUE CHAINS (GVCs)

Global Value Chains (GVCs) describe the breaking up of the production

process into different stages that take place in different countries; in
every step of the process, an unfinished product gains value until the
final product is complete. Therefore, why are GVCs important for
countries?
 GVCs are a driver of productivity growth, job creation, and
increased living standards.
 Countries could grow faster, import skills and technology, and boost
employment.
 With GVC-driven development, countries generate growth by
moving to higher-value-added tasks and by embedding more
technology and know-how in manufacturing, processes, and services
production.
GLOBAL VALUE CHAINS (GVCs)
 CLIMATE CHANGE

Human activities are now recognized as contributing to climate

change. CO2 is partly produced because of human activities such
as burning coal, oil and natural gas (“fossil fuels”), as well as
agricultural activities and deforestation; in that way, as GVCs
grow and economic activity expands, emissions increase, because
GVCs are associated with more shipping and more waste in the
aggregate than standard trade. The effect could be greater if
production increased more in higher polluting industries and
countries with a weak legal framework; for this reason, the
urgency to have a clear legal framework, along with a legal and
administrative apparatus that can enforce rights and protect the
natural resources.
CLIMATE CHANGE

Source: Global Carbon Project based of UNFCCC/CDIAC/BP/USGS.

Units: Billion tonnes of carbon dioxide per year (GtCO2/yr).
GOOD PRACTICES
 GOOD PRACTICES

The relational aspect of

GVCs can attenuate
environmental concerns
and also facilitate the
production of new
environmentally friendly
goods.

10
 GOOD PRACTICES

Some of contributions of GVCs to the Environment:

 Demanding environmental standards in GVC upstream firms.
Standards of several firms are high and ecofriendly.
 The relational nature of GVCs can also promote the transfer of clean
technology and know-how. Firms that have a brand to defend naturally
tend to align practices within the corporation.
 New and innovative environmental products. GVCs have a positive
impact on the environment by promoting innovation and by making
these clean technologies and environmental goods more affordable.
 Solar energy. The solar value chain relies on innovation and complex
production systems; so, several countries may be part of the value chain.
REFERENCES

▰ Blyde, J & Trachtenberg, D. (2020). “Global Value Chains in Latin America: A

Technical Note”, Inter-American Development Bank Publications. Retrieved
from https://
publications.iadb.org/publications/english/document/Global_Value_Chains_and
_Latin_America_A_Technical_Note_en.pdf

▰ The World Bank Group. (2020). “World Development Report 2020: Trading for
Development in the Age of Global Value Chains”. World Bank Publications.
Retrieved from https://www.worldbank.org/en/publication/wdr2020
GVCs and
Climate
Change:
A Golden
Opportunity

Miguel A. Lazo