Pandemic Climate Mitigation, and Reshoring : Impacts of a Changing Global Economy on Trade, Incomes,and Poverty

The resilience of global value chains has been put to the test by the COVID-19 pandemic, extremeweather events, and trade tensions spurred by growing economic nationalism and protectionism. Shocks in productionand trade can be transmitted from one country to another by global value chains, although they can also help to lessenthe blow of a domestic shock, such as a lockdown, and drive economic recovery. What shocks to global value chains shouldbe anticipated in the coming years Is it possible to design policies that can enhance resilience to trade shocks indeveloping countries without endangering growth This paper explores simulations from the ENVISAGE global computablegeneral equilibrium model to enhance understanding of the potential longer-term impacts of COVID-19 and the policyresponses it engenders in developing countries. The paperassesses the likely impacts of measures designed to reshore production and reduce reliance on imports. It also evaluatesother key factors shaping the global economy, including stylized scenarios to capture the essential elements ofpolicies to achieve carbon emission reductions that will have an impact on trade.