This paper examines the effect of the structural changes arising from the globalisation of production and innovation and from technological changes on the environment. Drawing on theories of international production from international business and innovation, we assess the impact of longterm technological change and changes in international production on the international division of labour and energy demand. We select two industrial sectors with different technological characteristics (the textile, clothing and footwear sector and the chemical sector). We examine the effects of the globalisation of production and of technological change on these two sectors on the level of industrial production and resource intensity in different regions and countries over the last 30 years. We speculate on the impact of globalisation of production and innovation in future pervasive technologies—information technology, biotechnology and nano-technology. The implications of these developments on industrial greenhouse gases emissions are assessed. q 2004 Elsevier Ltd. All rights reserved.