World's Readiness for Low-Carbon Future Continues to Drag

A new report has taken a first crack at measuring the extent to which the world's major economies are moving toward a low-carbon future — and the results are decidedly mixed.

"This report shows that there is a wide range of performance amongst the G20 countries when it comes to low carbon competitiveness. These performances reflect different starting points and levels of national ambition, but show that there is potential for all countries to improve and move towards low carbon best practice," London-based economics firm Vivid Economics writes in the analysis G20 Low Carbon Competitiveness.

According to Vivid Economics, "low-carbon competitiveness" is defined as a country's ability to generate wealth while simultaneously cutting its climate-changing emissions.

"How each nation adapts to a carbon constrained world will, to a large extent, determine its future economic competitiveness and ability to create prosperity for its resident," the report says.

Europe leads the pack among the richest countries, with France, the UK and Germany the current front-runners. The United States, the world's wealthiest and the No. 2 carbon polluter, is not there yet, according to the study.

"The U.S. has the potential to be a big winner from the clean energy revolution but is held back by relatively carbon-intensive infrastructure and high use of energy in the transport sector," the report states.

Among the emerging economies, South Korea earned special mention. That's thanks to the government's decision to shun business-as-usual growth in favor of low-carbon investments in its national stimulus. In 2008, the country invested $155 billion in new clean energy sources, a four-fold increase since 2004, outstripping investments in fossil fuels for the first time.

South Africa and Mexico are improving their carbon productivity at a faster rate than some advanced economies, the study revealed. Japan is considered a current leader, but it's falling fast in the rankings. Since the 1990s, its improvement in shifting to low-carbon has been one of the lowest of all. Japan was listed just above Brazil and Saudi Arabia, both of which are still largely clinging to the status quo to spur economic growth.

The new analysis flips an old and ugly myth on its head — that climate action kills a nation's economic competitiveness.

As the authors write, a more common-sense consensus is finally emerging, one that recognizes that countries best placed to benefit from the clean energy transition will become the most competitive in the coming economic system. And it's the G-20 nations, which account for 76 percent of world GDP, that stand to gain, or lose, the most from the switch.

Just imagine it: The renewable energy sector already employs 2.3 million people worldwide. That's more than the total number employed by the entire oil and gas industry. The possibilities for more job creation are just massive, given that most of the world's energy sources are sunlight, wind, tides and geothermal heat from the Earth.

The study was based on a first-ever quantitative assessment of three elements: where countries are positioned now in terms of their low-carbon readiness, an index that takes into account their current policies and GDP per ton of emissions; the rate at which their carbon competitiveness is improving; and the scale of the challenge they face in meeting the emissions reductions goals of the Intergovernmental Panel on Climate Change.

As part of its analysis, Vivid Economics determined which nations are working to deliver improvements needed to prevent global temperatures from rising more than 2 degrees Celsius — considered a threshold for catastrophic climate change.