Asia tops global low-carbon competitiveness index

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In its annual Global Climate Leadership Review 2013, The Climate Institute (TCI), an independent research organization, said that the momentum for climate action has shifted away from Europe and the US towards Asia.

The report, which examines international action on climate change, said that with more than one-third of the world's clean energy investments in 2012, Asia is on track to replace Europe as the world's largest clean energy investment region.

It noted that developing countries passed twice as many green laws as rich ones did last year.

The Philippines approved subsidies for clean energy sources and Thailand announced a voluntary emissions trading scheme (ETS) effective October 2014. Indonesia offered subsidies for geothermal power and Vietnam aims to cut its carbon emissions per unit of GDP by 8-10 percent by 2020.

China in particular, is on track to become one of the most competitive nations in a low-carbon global economy. The country ranked third in the Climate Institute/GE Low-Carbon Competitiveness Index, which was released as part of the Global Climate Leadership Review 2013 report.

The index measures the ability of G20 nations to provide prosperity for their citizens in a world that limits carbon emissions.

According to the index, France, Japan, China, South Korea and the UK are currently best positioned to prosper in the low-carbon economy, as they have, among other things, acknowledged the need to orient their economies towards low carbon-growth. China's ranking came about because of its major investments in clean energy, growth in high technology exports and policies on emission caps and energy efficient appliances.

At number 11, however, the US has fallen behind as much as China has leapt ahead. Australia has also been overtaken by Indonesia, falling from 16th to 17th place. The report attributed this to the global financial volatility, which reduced the carbon competitiveness of Western economies, but allowed developing countries to catch up.

"The next three years will be critical to sustain and boost delicate but important progress at the UN climate negotiations," TCI said in the report.

"Failure to implement effective and decisive action would have a disproportionate impact on our lives, our economy and our natural systems."

Three key conclusions can be drawn from the analysis provided in the Global Climate Leadership Review 2013:

1. Policy implementation to reduce emissions and drive low pollution investment around the world continues. Many countries recognise that reducing their dependence on high emission industries is in their economic self-interest.

2. The engine room of clean energy investment and carbon policies is shifting to Asia, particularly China.

3. Australia's sliding carbon competitiveness had a fragile reversal between 2008 and 2010 but the next few years will be critical to sustaining this trend and our historical legacy in crucial global climate negotiations due to conclude in 2015.

The second in TCI's annual series, the 2013 Review examines international action across several strands.

By: The Climate Institute (TCI)