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.
Turns out, only two are boosting carbon productivity quickly enough to meet the IPCC's targets: Mexico and Argentina. The report lauds the minimal use of air freight in both countries, plus Mexico's low rate of car ownership. Three other countries — China, South Africa and Germany — are at least "close to being on track" toward carbon productivity improvements that could meet global emissions reduction goals.
"The large number of rapidly industrializing nations at the top of this index shows that some countries are growing fast and are doing so in a way consistent with the projections for emissions underpinning these IPCC scenarios. Annex I countries [industrialized nations] generally have more work to do than non-Annex I countries, mainly due to the tougher presumed emissions targets. However this pattern is not universal," the report says.
The analysis was released just ahead of next week's G20 summit in Pittsburgh and a UN Summit on Climate Change in New York.
G-20 nations, who are responsible for 69 percent of total global warming emissions, are no strangers to making promises to green the global economy. These pledges speak to a growing recognition of the necessity and inevitability of the new energy economy.
But actual action remains elusive.
The UN Copenhagen conference in December is seen as the best chance for nations to politically sign up for a post-Kyoto, carbon-regulation regime. Without it, analysts warn that the world's ability to cut CO2 emissions would be substantially weakened, and current pledges would fall through.
"To get back on track we need a comprehensive outcome at the UN Climate Change Conference in December including ambitious targets for developed countries, strong commitments to action from industrializing countries, a finance package to support mitigation and adaptation in the developing world, and a robust and binding legal architecture to ensure trust building and transparency," Vivid Economics concludes.
But as December approaches, chances are looking all the slimmer. The latest news: Negotiations have stalled.
In fact, there are brand-new rumblings of a damaging U.S.-Europe rift that could water down and delay the securing of a tough agreement. That's assuming, of course, that one is even possible.
"Over the next few months countries have the opportunity to adopt credible policies to reduce emissions and to prosper in a low-carbon world," writes British economist Nicholas Stern in a preface to the report. "Moreover, the global economic recovery presents an ideal opportunity for countries to shift towards low carbon growth. Countries which don't seize this opportunity will undermine their future competitiveness and prosperity."