Historic U.S.-China Agreement to Cut Greenhouse Gas Emissions 

Energy, Environmental & Utilities Alert

November 12, 2014

In a surprise announcement last evening from Beijing, President Obama and Chinese President Xi Jinping committed to ambitious cuts in carbon emissions over the next 15 years with the hope of preventing catastrophic global warming. The joint announcement calls for the United States, by 2025, to reduce carbon emissions by 26-28 percent below 2005 levels and for China to reduce net carbon emissions starting in 2030 or earlier and to increase the overall share of non-fossil fuels in primary energy consumption to around 20 percent by 2030. The announcement lays the groundwork for a global agreement to reduce carbon emissions at the United Nations Climate Conference in Paris in December 2015. The recent announcement is significant because it is the first time that China — the world’s largest emitter of carbon pollution — has committed to reduce its emissions on a net basis. The joint statement acknowledged that:

The global scientific community has made clear that human activity is already changing the world’s climate system. Accelerating climate change has caused serious impacts. Higher temperatures and extreme weather events are damaging food production, rising sea levels and more damaging storms are putting our coastal cities increasingly at risk and the impacts of climate change are already harming economies around the world, including those of the United States and China. These developments urgently require enhanced actions to tackle the challenge.

U.S.-China Joint Announcement on Climate Change. China’s commitment to accelerate its transition toward renewable energy reflects a sobering recognition that air pollution from coal combustion is causing millions of premature deaths and lost workdays among the Chinese population. China’s soot pollution caused 1.23 million premature deaths in 2010, representing 9.7–13.2 percent of China’s total GDP. The co-benefits of reducing carbon pollution from coal-based power generation, including reducing the incidence of premature death and disease from the by-products of coal combustion, was a primary justification also for the EPA’s proposed Clean Power Rule. The rule, which EPA proposed in June 2014, would gradually transition the U.S. power generation sector — which accounts for about 1/3 of U.S. carbon emissions — toward cleaner forms of electricity, mainly natural gas, demand management, and renewable energy. EPA’s proposed rule would reduce carbon emissions across the power sector by 30 percent and soot and smog by more than 25 percent by 2030. EPA’s economic analysis of the proposed rule finds that it will generate net economic benefits to the U.S. economy of between $28-$49 billion by 2020, $43-$74 billion by 2025, and $49-$84 billion by 2030, mostly due to fewer deaths and sicknesses caused by the emission fine particulates, sulfur dioxide, and nitrogen oxides from coal power plants.

Whether the United States will be able to deliver on its commitment to reduce carbon emissions, however, is far from certain after Republicans secured a majority in the U.S. Senate following the midterm elections. The likely future Senate Majority Leader Mitch McConnell of Kentucky has vowed to block the EPA Clean Power rule and to defeat any proposed international treaty to cut U.S. coal emissions. Senator McConnell and other politicians from coal-producing states argue that transitioning away from coal and toward natural gas electricity (a market transition already occurring due to cheap and abundant shale gas) will hurt the U.S. economy. Stay tuned for the coming battle.


Peter J. Fontaine

Chair, Environmental


(215) 665-2723

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If you would like to learn more about the U.S.-China Agreement to Cut Greenhouse Gas, or how the EPA's proposed Clean Power Rule affects you and your business, please contact the Utility, Environmental & Energy practice group at Cozen O’Connor.