A Low-Carbon Economy (LCE) or Low-Fossil-Fuel Economy (LFFE) is an economy which has a minimal output of greenhouse gas (GHG) emissions into the biosphere, but specifically refers to the greenhouse gas carbon dioxide. Recently, most of scientific and public opinion has come to the conclusion there is such an accumulation of GHGs (especially CO₂) in the atmosphere due to anthropogenic causes. The over-concentrations of these gases are producing global warming that affects long-term climate, with negative impacts on humanity in the foreseeable future. Globally implemented LCEs therefore, are proposed as a means to avoid catastrophic climate change, and as a precursor to the more advanced, zero-carbon society and renewable-energy economy.

Internationally, the most prominent early step in the direction of a low-carbon economy was the signing of the Kyoto Protocol, which came into force on February 16, 2005, under which most industrialized countries committed to reduce their carbon emissions. Importantly, all member nations of the Organization for Economic Co-operation and Development except the United States have ratified the protocol.

Australia has implemented schemes to start the transition to a low carbon economy but carbon neutrality has not been mentioned and since the introduction of such scheme emissions have increased. The current government has mentioned the concept but has done little and has pledged to lower emissions by 5-15%. In 2001, The Howard Government introduced a Mandatory Renewable Energy Target (MRET) scheme. In 2007, the Government revised the MRET - 20 per cent of Australia's electricity supply to come from renewable energy sources by 2020. In 2009, the Rudd Government will legislate a short-term emissions reduction target, another revision to the Mandatory Renewable Energy Target as well as an emissions trading scheme. Renewable energy sources provide 8-10% of the nation's energy and this figure will increase significantly in the coming years. However coal dependence and exporting conflicts with the concept of Australia as a low-carbon economy. Carbon neutral businesses have received no incentive; they have voluntarily done so. Carbon offset companies offer assessments based on life cycle impacts to businesses that seek carbon neutrality. The Carbon Reduction Institute is one such offset provider, which has produced a Low Carbon Directory to promote a low carbon economy in Australia.

In China, the city of Dongtan is to be built to produce zero net greenhouse gas emissions. Chinese State Council has announced its aim to cut China's carbon dioxide emission per unit of GDP by 40%-45% in 2020 from 2005 levels.

In the United Kingdom, the Climate Change Act outlining a framework for the transition to a low-carbon economy became law on November 26, 2008. This legislation requires an 80% cut in the UK's carbon emissions by 2050 (compared to 1990 levels), with an intermediate target of between 26% and 32% by 2020. Thus, the UK became the first country to set such a long-range and significant carbon reduction target into law.

A meeting at the Royal Society on 17–18 November 2008 concluded that an integrated approach, making best use of all available technologies is required to move towards a low carbon future. It was suggested by participants that it would be possible to move to a low carbon economy within a few decades.