Germany, Italy and the United States will participate in the G7 summit as global leaders in green competitiveness, while Australia will attend as a ‘green laggard’, according to a new analysis published today (11 June 2021) by the Grantham Research Institute on Climate Change and the Environment and 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.

The report on ‘Navigating the green transition: insights for the G7’, by Pia Andres of the Grantham Research Institute and Dr Penny Mealy of Monash University, presents an analysis of green competitiveness since 1995 of the 11 countries attending the G7 Leaders’ Summit, as well as China.

It finds that Germany has consistently ranked first in the world in terms of the range and number of complex and technologically sophisticated green products that have been shown to be strong drivers of economic development and growth.

The analysis shows that Italy overtook the United States in the 2000s and currently occupies second place in the world rankings. However, Australia’s green competitiveness has significantly declined over the past 20 years and it now barely ranks in the top 100 of 231 countries and territories that were assessed.

The authors carried out the new analysis with a new tool, the ‘Green Transition Navigator’, which maps strengths and opportunities in the green economy for 231 countries and territories. It was launched earlier this year and based on research published in 2020 in the journal ‘Research Policy’.

The tool shows each country’s Green Complexity Index (GCI), which measures both the number and the complexity of green products that it is able to export competitively.

It also provides the Green Complexity Potential (GCP) for each country, which indicates the relative ease with which it can become more competitive in new and technologically sophisticated green products and technologies.

Pia 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 Penny Mealy said: “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.”

Access the report here: Navigating the green transition: insights for the G7. For interviews with the authors, please call Bob Ward on +44 (0)7811 320346 or email r.e.ward@lse.ac.uk

Notes to Editors:

The Grantham Research Institute on Climate Change and the Environment was established in 2008 at the London School of Economics and Political Science. The Institute brings together international expertise on economics, as well as finance, geography, the environment, international development and political economy to establish a world-leading centre for policy-relevant research, teaching and training in climate change and the environment. It is funded by the Grantham Foundation for the Protection of the Environment, which also funds the Grantham Institute – Climate Change and the Environment at Imperial College London. www.lse.ac.uk/grantham/

The ESRC Centre for Climate Change Economics and Policy was established in 2008 to advance public and private action on climate change through rigorous, innovative research. The Centre is hosted jointly by the University of Leeds and the London School of Economics and Political Science. It is funded by the UK Economic and Social Research Council. www.cccep.ac.uk

The Institute for New Economic Thinking was founded in 2012 at the Oxford Martin School as a multidisciplinary research centre dedicated to applying leading-edge thinking from the social and physical sciences to global economic challenges. It has over 75 affiliated scholars from disciplines that include economics, mathematics, computer science, physics, biology, ecology, geography, psychology, sociology, anthropology, philosophy, history, political science, public policy, business, and law working on its various programmes. INET Oxford is a research centre within the University of Oxford’s Martin School, a community of over 300 scholars working on the major challenges of the 21st century and has partnerships with nine academic departments and colleges. www.inet.ox.ac.uk/

The Smith School of Enterprise and the Environment equips enterprise to achieve net zero emissions and the sustainable development goals, through world-leading research, teaching and partnerships. www.smithschool.ox.ac.uk/

SoDa Labs was established in 2018 as an empirical research laboratory associated with Monash University’s Department of Economics and Department of Econometrics, within the Monash Business School. It applies new tools from data science, machine learning, and beyond to answer social science questions. www.monash.edu/business/soda-labs

Keep in touch with the Grantham Research Institute at LSE
Sign up to our newsletters and get the latest analysis, research, commentary and details of upcoming events.