Globalization will work better for Planet Earth than its alternative

Source: This post is created based on the article “Globalization will work better for Planet Earth than its alternative” published in Live Mint on 19^th May 2023.

Syllabus Topic: GS Paper 3 – Environment and Climate Change

News: McKinsey Global Institute has discarded the view that the path to sustainability will involve moving away from globalization.

The McKinsey research suggests that the resources, innovations, and capital required to reach net-zero emissions are unevenly distributed globally, necessitating international cooperation and exchange.

WTO also supports that trade is crucial for countries to reduce emissions and build climate resilience.

What are some of the examples that prove that globalization is necessary for decarbonization?

First, all major world regions rely on imports for at least one input necessary for the net-zero transition. For instance, over 75% of the global supply of lithium, essential for electric vehicle batteries, comes from Australia and Chile.

Second, Decarbonizing sectors that produce most GHGs will require the development of low-emission technologies and infrastructure. Building and operating these assets requires: new mineral resources, new fuels, and complex manufacturing at scale. Therefore, International supply chains are integral to produce these assets.

Third, Minerals like copper, lithium, and rare earth metals, vital for electric vehicles and renewable power are not available in every country.

Fourth, the distribution of manufactured goods like solar panels and electric vehicles relies on global supply chains.

Fifth, developing countries will need more investment for the net-zero transition. Hence, access to cross-border financial flows will be necessary for these economies.

Sixth, if economies attempt to localize or diversify supply chains, the need for capital and intangibles will increase.