examples of cost drivers in globalization

That means multinational corporations with clean state-of-the-art technologies can transfer their green know-how to countries with low environmental standards. Globalization doesn’t just entail the movement of manufactured goods, but also the transfer of intermediate, capital goods and technologies. Through what’s known as the technique effect, we know globalization can trigger environmentally friendly technological innovations that can be transferred from countries with strict environmental regulations to pollution havens.

Deglobalization may worsen emissionsīut in fact, deglobalization may not necessarily translate into reduced emissions of harmful gases such as CO₂, SO₂, NO₂, but could actually worsen it. The pressure on international firms to remain competitive forces them to adopt cost-saving production techniques that can be environmentally harmful. The increased economic activity leads to greater emissions of industrial pollutants and more environmental degradation. Those who support this bleak view of globalization argue it creates global competition, resulting in a boost in economic activities that deplete the environment and its natural resources. Cows stand by the side of a road as a truck drives through smog near New Delhi, India, in November 2017.

Examples of cost drivers in globalization