From globalization to regionalization? Assessing its potential environmental and economic effects

There are increasing warns of the withering of globalization but the rise of regionalization. In this paper, we provide a quantifiable definition for regionalization in a global multi-regional input–output framework and set different scenarios of regionalization to simulate their potential effects on the environment and economy. Our results show that the “North America-Europe-Asia” tripartite regionalization would reduce the CO2 emissions in Asia (China in particular) and Europe, but increase substantial emissions in North America, leading to a slight reduction in global CO2 emissions. However, it would cause large value-added losses for some developing countries such as China, India, and Vietnam but bring value-added gains for some developed countries, enlarging the economic gap between developing and developed nations. In terms of industries, the regionalization of technology-intensive supply chains would have larger effects than other industries. Moreover, we present the results for several different scenarios of partial regionalization, which we set for capturing some more realistic regionalization cases in the future world.