US and China in historic carbon emissions deal

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Fabulous news from CNN:

At the end of a trade summit in China, U.S. President Barack Obama announced a climate change agreement with Chinese President Xi Jinping that would cut both countries’ greenhouse gas emissions by close to a third over the next two decades.

Under the agreement, the United States would cut between 26-28% of the level of its carbon emissions set in 2005 by 2025, and China would do the same by 2030. The administration hopes the announcement by the two superpowers will spur other nations to do the same. The White House said the ultimate target is to “achieve deep economy-wide reductions on the order of 80% by 2050.”

A senior administration official calls the goals both “ambitious and achievable,” but also acknowledged that U.S. domestic politics could put a damper on the announcement. Saying “leading climate deniers” in the GOP might try to stop the initiative, the official hinted the President may act alone if necessary.

“Congress may try to stop us, but we believe that with control of Congress changing hands we can proceed with the authority we already have.” The official added, “This is really the crusade of a narrow group of people who are politically motivated and have made this a cause celebre, but we believe we will be successful.

The administration hopes to sell the plan back home by touting the anticipated savings on energy costs. “Consumers and businesses will save literally billions of dollars” a senior administration official said. The plan offers initiatives and incentives to develop more solar and wind power across both countries, the official said.

Another official said the agreement “won’t all fall together in five minutes,” but hopes this will demonstrate to other nations that working together to reduce carbon emissions would prove that “we can work together to enhance deployment of sustainable clean technologies.”

In a statement, the White House said the announcement marks the first time China has agreed to cut its carbon emissions, and said the Chinese are calling for “an energy revolution” that would include a broad economic reform program that would address air pollution. China has agreed to provide an “additional 800-1,000 gigawatts of nuclear, wind, solar and other zero emission generation capacity by 2030, more than all the coal-fired power plants that exist in China today and close to total current electricity generation capacity in the United States.”

That’s the real breakthrough, China has agreed to a hard emission cap not just per capita contributions. The US has doubled its committed reductions. How fantastic.

Thankfully, the Australian carbon price and renewable energy target has facilitated Australia’s energy transformation at pace, as well as positioning the nation to lead carbon pricing globally and pursue a big export push with the innovation generated by that leadership.

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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.