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US-China Climate Change Announcement Signals New Phase for Global Action

Nearly a year ago, the United States and China laid out their national climate action plans for the coming years. These were the first in what is now a substantial list of national climate action plans—plans that will form the basis of a new international climate agreement to be finalized in Paris later this year. Now, the world’s two biggest emitters have taken the next step by cementing their plans, jointly announcing key actions they’ll take to achieve their national goals, and clarifying their views on the upcoming Paris agreement.

The announcement not only reveals the critical climate actions these countries will take domestically—it builds the necessary momentum to ensure that the new international climate agreement is a successful one.

China Strengthening Domestic Action

The new statement provides important details about China’s plan for achieving the commitment the country made 10 months ago to peak its emissions by 2030, with an intention to peak earlier. An important element is China’s announcement of a national emissions trading system, which will launch in 2017. An ETS has the potential to be a powerful instrument to reduce emissions over time, and draws on China’s experience with its seven existing city- and provincial-level carbon-trading pilots.

China has already been ramping up its climate action commitments over time, with limits on coal use, an expansion of non-fossil energy, energy efficiency targets and measures, passenger vehicle fuel economy standards, and steps to rebalance its economy away from emissions-intensive industries towards services. Last week’s announcement builds on these actions, with the country committing to new fuel efficiency standards for heavy-duty vehicles; acceleration of efforts to phase down hydrofluorocarbons, potent greenhouse gases often used as refrigerants; targets for public transportation and green buildings; and a “green dispatch” system to provide preference to renewable, efficient and low-carbon electricity sources.

U.S. Strengthening Domestic Action

The United States also reaffirmed its national commitment to reduce its GHG emissions 26-28 percent below 2005 levels by 2025, as outlined in its official INDC submission this past March. This statement highlights many of the actions the United States has recently taken towards meeting this goal—including finalizing its Clean Power Plan—as well as new actions it will take moving forward.

In the new announcement, President Obama committed to finalize in 2016 proposals to set fuel efficiency standards for medium- and heavy-duty trucks, as well as methane emission standards from new landfills and natural gas infrastructure. The country will further reduce its HFC emissions and use, building on rules established in July 2015. And the administration will finalize more than 20 efficiency standards for appliances and equipment by the end of 2016--helping the nation achieve its previously announced goal to save a cumulative 3 billion metric tons of CO2 from standards by 2030.

Working Together for Strong Paris Agreement

The announcement is not just big news for the world’s two largest emitters, but for climate action internationally.

It demonstrates that China and the United States have found common ground on the three most critical elements of a strong agreement in Paris. Both countries recognize the need for a successful agreement that ramps up ambition over time, pointing toward a low-carbon transformation of the global economy this century, and a transparent system that will instill confidence that countries will follow-through on their commitments. It also highlighted the need to assign responsibilities according to national circumstances in order to help ensure a fair approach for both developed and developing countries. These positions will need to be clarified and deepened in the new international agreement, but the U.S.-China announcement has provided an important starting point.

China’s commitment to limit its domestic and international investments in carbon-intensive activities, which parallels U.S. policy, sends a strong directional signal to investors around the world. China’s climate finance pledge of $3.1 billion is a watershed moment, raising the country to a new level on this issue. These new funding streams should help reassure developing countries that climate finance will be available from a broader pool of contributors.

Further bilateral and multilateral cooperation led by China will contribute to its role as a leader on climate change and other environmental issues. China’s commitment also sends a message to other emerging economies that they, too, can contribute significantly to climate change mitigation efforts.

Looking Ahead

The global action needed to confront climate change is now underway. Countries continue to put their pledges on the table, and now the two biggest emitters have doubled down on moving strongly to combat catastrophic climate change. Momentum towards an ambitious global agreement is building—progress that should continue at upcoming meetings of the global development banks and the G-20.

As China prepares to lead the G20, it is well-positioned to set an example. The United States and China have both committed to support strong economic governance. This commitment should include a focus on strong environmental governance as well, now made more likely by the joint statement. In addition, China’s leadership of new financial institutions, such as the Asian Infrastructure Investment Bank, is another avenue for China to showcase its new green commitments.

The announcement in Washington last week is a first important step in a new phase of climate action. But success will require persistence. All countries must continue to increase their climate action commitments in order to both create a robust international agreement later this year and lay the foundation for progress in the coming decades.

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