Eight years after the adoption of the Paris Agreement, the race to net zero is well underway, and some countries are clearly standing out.
In 2015, 196 parties signed the Paris Agreement at the UN Climate Change Conference (COP21) in Paris, therefore committing to a legally binding climate action treaty. Since then, countries around the world have begun implementing measures to limit “the increase in the global average temperature to well below 2°C above pre-industrial levels” and pursue efforts “to limit the temperature increase to 1.5°C above pre-industrial levels” – the overarching goals of the Paris Agreement.
According to the Intergovernmental Panel on Climate Change (IPCC), limiting global warming to 1.5°C will require a 43% decline in greenhouse gas emissions by 2030, so reducing emissions is the main focus globally.
To understand which countries are leading this decarbonization, we need to look at the sources of greenhouse gas emissions around the world. The great majority of emissions (73.2%) comes from the burning of fossil fuels for electricity, transport and heat. For that reason, it is fair to say that becoming a decarbonization leader means transitioning away from fossil fuels for energy.
Countries leading the energy transition
Considering global investment in renewable energy capacity from 2010 to 2019, it is clear that China (US$758B), the United States (US$356B), Japan (US$202B), Germany (US$179B) and the UK (US$122B) are leading the race.
But a more complete picture of the decarbonization progress can be found in the World Economic Forum (WEF)’s Energy Transition Index (ETI), which rates countries’ energy transition based on three aspects: economic development and growth, energy security and access, and environmental sustainability.
The latest ETI reveals that investment in renewable energy doesn’t always equate decarbonization progress: China, the biggest investor, ranked only number 68 on the 2021 ETI. This is because of the country’s size, and the fact that most of its energy currently comes from polluting fossil fuels such as coal, oil and gas. The country is making fast progress, however: it was the first country to build installed solar PV capacity beyond 100 GW in 2021.
But overall, smaller and mostly European countries are leading the energy transition ranking. Let’s have a look at the top 10: together, these countries account for around 2% of the global population and approximately 3% of energy-related CO2 emissions.
1. Sweden
It is no surprise that Sweden tops the index: the country is aiming to cut greenhouse gas emissions by 59% by 2030 compared with 2005, and to have a net-zero carbon economy by 2045. It was also the first country to introduce carbon pricing and has the highest carbon tax in the world at €122 per ton in 2023.
Today, the bulk of Sweden’s energy comes from nuclear, hydro and biofuels, with an increasing portion of wind and solar.
2. Norway
Norway has set an ambitious target of halving greenhouse gas emissions by 2030 compared to 1990, and is on track to deliver on this pledge. While the country is a large exporter of oil, its own domestic energy mix is slowly moving away from fossil fuels, prioritizing hydro, biofuels, solar and wind. It was also one of the first countries to introduce a carbon tax, which now stands at around €76 per ton. Today, it is estimated that 85% of Norway’s domestic GHG emissions are either covered by the EU ETS or that carbon tax.
3. Denmark
Denmark is working to cut GHG emissions by 70% from 1990 levels by 2030, and to source at least half of its energy needs from renewables by 2030. Traditionally based on oil, natural gas and coal, Denmark’s energy mix has now diversified to include more biofuels, wind and solar generation.
4. Switzerland
Of all the countries analyzed by the International Energy Agency (IEA), Switzerland is the one with the lowest carbon intensity, mostly because a large part of its electricity is generated from nuclear and hydro energy. The country is now looking to phase out nuclear power, investing instead in renewables like wind and solar.
5. Austria
Austria has set a deadline of 2040 to achieve net zero emissions – a more ambitious target than many other economies. To achieve that, the country is largely betting on biofuels, as well as hydro, wind and solar power.
6. Finland
Finland is breaking all records when it comes to targets: the country aims to be a net zero economy by 2035. Oil, coal and natural gas power generation have been declining steadily since 2010, as the country increases its share of biofuels, nuclear, hydro, wind and solar energy.
7. United Kingdom
The UK plans to cut greenhouse gas emissions by at least 68% by 2030, from 1990 levels, and to achieve net zero emissions by 2050. In fact, in 2020, the country’s emissions had already dropped by almost 45% compared to 1990. The UK is making progress by reducing its dependence on coal, oil and natural gas, and increasing the amount of biofuels, renewables and nuclear energy it uses.
8. New Zealand
New Zealand has largely increased the proportion of renewables in its energy mix since 2000. Today, it gets its energy from a mix of oil, coal, natural gas, renewables, biofuels and hydro. The country aims to reach net zero emissions by 2050.
9. France
France has the second-largest nuclear power capacity in the world, which is supporting a low-carbon energy mix. Aiming to achieve a net zero economy by 2050, France is reducing its reliance on fossil fuels and investing in renewables and biofuels.
10. Iceland
In Iceland, renewables will account for over 90% of global electricity capacity expansion between 2022 and 2027, and are set to become the largest source of electricity generation by 2025. The country has a goal of cutting greenhouse gas emissions by 55% by 2030 and achieving carbon neutrality by 2050.
What makes countries decarbonization leaders
According to the WEF, certain criteria can help predict the decarbonization performance of countries. These include “low levels of fuel subsidies, enhanced energy security from a diversity of fuel mix and import partners, improving carbon intensity, reduced dependence on fossil fuels in the energy mix, and a strong regulatory environment to drive the energy transition”.
Greenhouse gas emissions by country
In 2019, the 10 most polluting countries were China, the US, India, Russia, Japan, Germany, South Korea, Iran, Canada and Saudi Arabia. To know more, check out our article about the world’s biggest carbon polluters.
Take the first step to turn your company into a decarbonization leader: get in touch with our sustainability specialists.
