Five reasons the China-US climate deal is a big deal

This is an excerpt from the Climate Council report, The US-China joint announcement on climate change and clean energy co-operation: What's the big deal?

1. It builds on earlier efforts and sends a strong message to the rest of the world that both these superpowers are serious about tackling climate change leading up to a crucial year for climate negotiations.

2. At the UN Climate Summit in Copenhagen in 2009, the world failed to reach agreement mainly because of conflicting positions between developing and developed countries. This joint US-China climate announcement is significant because it shows how both developed and developing countries can work together to tackle climate change. Further, China taking on an absolute emission reduction commitment signals that developing countries will also be expected to take on these kinds of commitments.

3. The US and China are major drivers of the global economy – this announcement could have a significant impact on economic decisions worldwide. For example, according to Citigroup analysts, this announcement could result in a $US3.9 trillion ($A4.5 trillion) loss in revenue for ‘Big Oil' and ‘Big Coal' over the next 15 years from the joint reduction of greenhouse gas emissions by the world's two biggest economies. Other analysis shows how China, by boosting markets in water, wind and solar power is driving down costs and accelerating the uptake of renewable energy.

4. By showing leadership, these two heavyweights can help build global momentum and encourage other major economies and polluters to join them in accelerating global action on climate change. We've seen an example of this as recently as the G20 meeting in Brisbane in November when pressure by the EU and the US to get climate change on the summit's agenda resulted in the G20 ‘Brisbane Communique' outlining members commitment to tackle climate change and to communicate post-2020 domestic climate targets as soon as possible and preferably by the first quarter of 2015.

5. The timing of the US-China climate announcement is important because it comes well before the UN climate summit in Paris next year and with significant time for other major polluters and economies to state their post-2020 emissions reduction targets. This is a positive sign for the international community coming to an agreement in Paris.