The impact of polycrisis on GPNs—a focus on the EU’s trade policy response to the climate crisis

Abstract

This paper explores how policy reactions to the polycrisis seek to reshape GPNs, encouraging new forms of decoupling and recoupling. I focus on the EU’s trade policy responses to the climate crisis, especially carbon tariffs and the deforestation regulation. These new measures represent a shift from traditional trade policy and a conscious effort to “decouple” EU GPNs from certain geographies where negative environmental externalities are considered unacceptably high. I argue that compared to prior state interventions motivated by strategic and geo-political objectives, this represents a novel form of “sustainability-based decoupling.” It will change incentive structures and geographies in several GPNs.