Our Low-Carbon Future: Who Wins, Who Loses?

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The countries represented by the Group of 20 Finance Ministers and Central Bank Governors—more commonly known as the G20 —generate almost 70 percent of the world’s greenhouse-gas emissions. At the end of this week, they will be meeting in St. Andrews, Scotland, to figure out ways to "rebalance" the global economy. Though carbon is not specifically on the agenda, before long it will play a leading role in determining the very global imbalances this week's meeting hopes to address.

Why? Simply put, the days of cheap, abundant fossil-fuel supplies are numbered. Countries are starting to put a price on carbon. And as the globabl community begins its inexorable shift toward a safe and prosperous low-carbon future, the countries making moves today to reduce their reliance on coal and oil will doubtless thrive; those that do not will find their growth and competitiveness throttled. It's that simple.

TckTckTck.org partner E3G [3] and The Climate Institute [4], based in Australia, commissioned Vivid Economics [5] to examine which of the G20 countries are best positioned to prosper in a low carbon world.

The study—G20 low carbon competitiveness [6]—looked at numerous economic variables including such factors as efficiency of electrical grids and dependence on air freight, The report identifies which countries are leading, which are moving up the ranks, and what the laggards will need to do to “close the gap” between their current rate of improvement and the necessary outcome—holding the global average temperature rise as far as possible below 2°C. .

Leaders and Laggards

• Of the G20 countries, the “Top Five” that are best positioned for the inevitable shift to a low-carbon economy, in order, are France, Japan, the United Kingdom, South Korea, and Germany.
• The “bottom three” include India, Indonesia, and Saudi Arabia.
• Canada and the United States are ranked near the middle of the pack, at #7 and #10 respectively.

The countries ranked highest are generally those that are currently wealthy and, in various ways, have demonstrated a commitment to energy efficiency and low carbon energy production. Economic health is not as essential to the scoring as clean-energy investment, as demonstrated by the low ranking of Saudia Arabia, a relatively prosperous nation but one with little, if any, commitment to green energy.

How Things Are Changing

• Improving Fast: Of the G20 countries, the “Top Five” in terms of decoupling economic growth from carbon emissions are, in descending order, Germany, South Africa, Mexico, the United Kingdom, and France.
• Laggards: The “bottom three” that are proving to be the slowest to adjust their economies to a low carbon world are, in descending order, Japan, Brazil, and Saudi Arabia, which ranked dead last.
• The United States and Canada are ranked in the top half of the pack, at #6 and #9 respectively.

The leaders are showing that, in both developed and developing countries, it is possible to tackle emissions without hurting the economy. Countries cannot afford to rest on their laurels. Japan once led the world in improving its energy efficiency but has been losing ground since 1990.

Who is Closing the Gap the Quickest?

• Who’s closing the gap? Of the G20 countries, only Mexico and Argentina are improving their carbon productivity at the rate likely to be needed to hold global average temperature rise below 2°C.
• This ranking is based on an assumption that developing countries will only need to slow the rate of growth of their emissions, whereas the emissions of developed countries will need to fall rapidly, enabling global emissions to peak before 2020.
• China, South Africa and Germany are close to being on track to deliver their fair share of the global effort required by science.
• Other countries have a long way to go in closing the gap. Those with most work to do, in descending order, are Saudi Arabia, Russia, Turkey and Australia.