New report reveals G7 country as consistent ‘green leader’

Energy & Climate Change

The G7 countries of Canada, France, Germany, Italy, Japan, the UK and the US are this week thrashing out everything from the intricacies of post-Brexit Britain to the continued rollout of Covid-19 vaccination programme across the globe.

And with both COP15 and COP26 to come, it’s natural that discussions will include the ever-present threat of climate change.

Amid the summit, this year held in the stunning surrounds of Cornwall, a new analysis published today (June 11th) shines a light on which G7 countries are continuing to lead the way in terms of ‘green competitiveness’.

The ‘Navigating the green transition: insights for the G7’ report is by the Grantham Research Institute on Climate Change and the Environment, the ESRC Centre for Climate Change Economics and Policy at the London School of Economics and Political Science, the Institute for New Economic Thinking at the University of Oxford, and SoDa Labs at Monash University.

In it authors Pia Andres of the Grantham Research Institute and Dr Penny Mealy of Monash University use a new data-driven online tool, the Green Transition Navigator, to analyse the green competitiveness of the seven individual G7 member states and invited countries (Australia, India, South Africa and South Korea). The analysis also includes China ‘due to its recent rise to prominence in producing and exporting many green technologies and products’.

In one segment of the analysis rather than looking at green competitiveness in terms of the number and diverse range of green exports alone it uses a Green Complexity Index (GCI). The GCI includes both the number of and complexity of green products that countries are able to competitively export as well as looking at the productive capabilities that are likely to place them in good stead to thrive in the transition to the green economy.

According to the report, high ranking GCI countries have also been shown to have higher rates of environmental patenting, lower CO2 emissions and more stringent environmental policies (Mealy and Teytelboym, 2020).

Germany took the top spot in the report – which looks at data from 1995 to the present day – in terms of GCI with a GCI score of 1, followed by Italy (2), the US (3), China (4) and the UK (8).

With a GCI score of 96 the analysis identifies Australia as a ‘green laggard’.

On the findings Andres said: “Our analysis shows that Germany has consistently held its position as a ‘green leader’, followed by Italy and the United States. These countries currently have productive capabilities that allow them to competitively export a wide range of ‘complex’, or technologically sophisticated, green products.

“While competitiveness in green products allows countries to take advantage of the green transition, competitiveness in products with higher complexity is also important, as it has been shown to enhance countries’ overall economic growth and diversification prospects.”

Dr Mealy added: “China has rapidly increased its competitiveness in green products over the past 20 years and is now the world leader in exporting solar photovoltaic cells, fuel cells and electric soil heating apparatus, among other products. Australia, on the other hand, has seen a significant decline in its green production capabilities over the past two decades and now lags behind many countries in terms of its capacity to competitively export products relevant to the green economy.”

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