SINGAPORE - China, Japan, Germany and the United States are among the nations set to be the biggest winners in the race to go green, an analysis shows, as investors look for the best places to earn a return in the global fight against climate change.

Australia was a laggard but has huge renewable energy resources, while Singapore had yet to realise its full potential as a green services hub, said the analysis by Swiss global wealth and asset manager Lombard Odier and Oxford University's Smith School of Enterprise and the Environment.

The greening of the global economy is one of the greatest financial challenges and opportunities of all time, running into many trillions of dollars over the coming decades.

But which nations are well placed to capitalise on green growth to fight climate change? Which ones have the greatest potential and skills?

These are becoming increasingly urgent questions for investors as the imperative to cut greenhouse gas emissions and meet increasingly tough climate regulations grows.

To find out, Lombard Odier and the Smith School of Enterprise and the Environment looked at which countries specialised in high-growth green industries, which nations were laggards, and which ones were leaders in terms of directing pandemic stimulus funds towards a "green recovery".

They took a 25-year perspective on countries' standing in global trade in high-growth green industries and assessed each nation's competitiveness in green products and possible future potential.

They found that Germany, Italy, Spain, the US and China are set to benefit from the green transition, due to their strong green manufacturing and technological capabilities.

China in particular was playing an increasingly central role in the wind and solar markets, potentially offering the highest growth in both markets for investors, said the study released last Tuesday (Nov 30).

China also had the highest exports of renewables by volume, while North American and European green energy firms generated a higher proportion of their revenues through exports.

US and Chinese wind and solar companies also accounted for nearly half of the global revenue generation by publicly listed wind and solar companies, Dr Michael Urban, deputy head of sustainability research at Lombard Odier, told a briefing on the study.

Covid-19 recovery spending could drive changes in green production capacity in the future. Some highly ranked countries in terms of green product complexity, such as Italy and the Czech Republic, were spending relatively little on their green recovery.

Britain was spending far more on green stimulus and it also scored highly on green competitiveness. Spain, Denmark and Israel were also big green spenders, while the US and Australia were laggards. Geopolitical tensions were also risks for the US and Australia.

The analysis also pointed to Singapore's role as a leading finance centre and its strong governance, but the country has yet to achieve its potential to be a green services hub.

But the city state, because of its strong technological capabilities, has competitive strengths in complex green products, such as those used for monitoring air pollution or assessing environmental influences.

"What we got out of this analysis was that the countries that are exporting solar and wind products are those that are most likely to gain from this transition," Dr Matt Ives, a senior research associate at the Smith School, told the briefing.

The renewable energy industry has become one of the most vibrant and fast-changing sectors of the global economy, attracting hundreds of billions of dollars of investment annually, a figure set to grow quickly as costs fall further for wind turbines, solar panels, electrolysers and batteries. Electrolysers use energy to split water into hydrogen and oxygen - hydrogen is regarded as a next-generation clean fuel.

Financing the global shift away from fossil fuels represented a US$50 trillion (S$68 trillion) investment opportunity, Mr Bill Winters, group CEO of Standard Chartered Bank, told a panel at the World Economic Forum in Davos earlier this year.

The International Energy Agency says to reach net zero emissions by 2050, annual clean energy investment worldwide will need to more than triple by 2030 to around US$4 trillion, with renewable energy set to dominate the energy system by the mid-century.

Those countries that are producing the products that allow the world to capture green energy will stand to gain, said Dr Ives.

"So, solar panels and wind turbines, batteries and electrolysers - those countries that have invested early in those products and those capabilities like Germany, China, the US, Japan, Italy and Spain. They're the ones that are going to lead the future."

Key findings on Singapore

- Singapore scored a much lower ranking in green product complexity compared with other advanced economies such as the United States, China, Japan, Spain and Italy. Green product complexity refers to the number and sophistication of green products exported competitively to meet global demand for green technologies as well as the potential to develop, market and export such products.

- One of the reasons for this lack of progress is Singapore's limited renewable energy potential and its reliance on natural gas for most of its electricity generation.

- It has high-ranking universities and green innovations, but more work is needed to capitalise on these knowledge gains and bring them to the global market.

- With very limited green energy resources, the city state is already looking to import green energy from other countries.