U.S. and China reach historic deal

December 8, 2014

On November 11, 2014, U.S. President Barack Obama and Chinese President Xi Jinping announced an ambitious plan to reduce greenhouse gas emissions (the Plan). In what is being touted as a significant step forward in the fight against climate change, the U.S. will aim to reduce its emissions by 26%-28% below its 2005 levels by 2025. China will use its best efforts to achieve peaking carbon dioxide emissions by 2030 or earlier, and will aim to increase its share of non-fossil fuel energy generation to around 20% through clean energy investment in sources like solar and wind. To do so will require the deployment of 800-1,000 gigawatts of clean energy, nearly equal to the entire electricity generation capacity of the U.S.

The Plan marks the first-ever commitment by China to cap its carbon dioxide emissions, with both sides feeling optimistic that it will spur other countries to escalate the rate at which they cut their own greenhouse gas emissions. Ultimately, the U.S. and China are hopeful that the momentum from the Plan will foster a new global climate deal that will be concluded at the United Nations Climate Conference in Paris in 2015. To this end, the White House Office of the Press Secretary released the following statement: “The United States and China hope that by announcing these targets now, they can inject momentum into the global climate negotiations and inspire other countries to join in coming forward with ambitious actions as soon as possible, preferably by the first quarter of 2015. The two Presidents resolved to work closely together over the next year to address major impediments to reaching a successful global climate agreement in Paris.” As the world’s two largest greenhouse gas emitters, accounting for approximately 40% of worldwide emissions, a climate agreement between the U.S. and China has long been viewed as an essential prerequisite to creating a new global accord.

The Plan builds on and extends the targets set by Obama under the 2009 Copenhagen Accord, where he agreed to reduce U.S. carbon emissions by 17% below 2005 levels by 2020. According to Secretary of State John Kerry, the U.S. is on track to meet that goal, with wind energy production tripling and solar energy production increasing 10-fold since Obama took office in 2009. In order to meet the Plan’s target by 2025, the U.S. will have to double the pace of carbon emission reductions it targeted for the period from 2005 to 2020.

Despite the optimism, many critics have been quick to point out that the Plan doesn’t do enough to alleviate global warming. According to the International Energy Agency’s baseline scenario, China would see its carbon emissions peak by 2030 anyway, producing 18% of its energy from non-fossil fuel sources. Furthermore, the Plan doesn’t legally bind either country should they fail to reach their targets; there are no penalties or enforcement mechanisms available. This has cast doubt on the ability of both countries to reach their climate goals.

The Plan also intensifies pressure on the Canadian government, which has faced fierce criticism over its failure to meet international climate commitments and its promised regulations for the oil and gas sector that have been delayed for several years. The Harper government has long stated that it would follow the lead of the U.S., and that it would not act on climate change unless there were bold commitments from other major emitters. Canada now has a lot of catching up to do should it wish to align its climate policies with its largest trading partner.

Ultimately, the Plan represents a solid step forward on the climate change issue, especially as it relates to the surprising reversal of China’s energy policies. With plans to cap carbon emissions and eventually steer away from the continued development of coal generation, many are optimistic that the Plan will pave the way for continued progress in the near future.

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