Booming Low-Carbon Economy

Study says policy environment has improved in many countries since Copenhagen, putting low-carbon economy on track to exceed $2tr mark by 2020

The global low-carbon economy has shown encouraging signs of growth since the turn of the year, despite the failure of the Copenhagen Summit to deliver a binding international climate change treaty.

That is the conclusion of a comprehensive new report undertaken by the United Nations Environment Programme (UNEP) and think-tank AccountAbility, which revealed that the policy environment and market conditions for many low-carbon firms are improving rapidly.

The study, which was released late last week at the Business for Environment Global Summit (B4E) in South Korea, analysed national climate change action plans and the scale of economic growth for low-carbon products and services in 95 countries responsible for 97 per cent of global economic activity and 96 per cent of global carbon emissions.

The resulting Climate Competitiveness Index (CCI) found that 46 per cent of countries had delivered improvements in their climate policy framework since the end of the Copenhagen Summit last year. Moreover, 32 countries were judged as having delivered "significant improvements" in their action plans, with Germany, China and the Republic of Korea praised as outstanding examples.

The report argued that this improvement in policy was driving a substantial growth in the low-carbon economy, which it estimates will now be worth over $2trn a year by 2020.

"This report comes as a breath of fresh air," said Alex MacGillivray, managing director at AccountAbility, in a statement. "The CCI shows that countries at all levels of development can develop political leadership, stronger institutions and engage with stakeholders to deliver climate competitiveness. Climate competitiveness is no longer rhetoric. It is a real, massive and dynamic economic frontier."

The report confirmed that a number of low-carbon hubs are quickly emerging, which are well positioned to dominate the fast-expanding global market for green goods and services.

In particular, it praised Sweden, Denmark, Germany, Japan and France for showing the "most consistent progress" in terms of both climate policy and low-carbon markets. Meanwhile, the US and UK were singled out for delivering strong climate policies, while the emerging BASIC nations (Brazil, South Africa, India and China) were also praised for "progressing towards climate competitiveness".

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