The news from Beijing this week that the U.S. and China are committing to ambitious goals on climate change is, we think, monumental. No two countries are more important to tackling the problem than the largest carbon emitter over the past two centuries, the U.S., and the largest current emitter, China. While many observers are focusing on the ramifications of the announcement for upcoming international negotiations, we believe that the announcement also has potentially profound domestic effects for both countries.
For the U.S., the announcement could have significant implications, both legal and political, for the centerpiece of President Obama’s climate policy, proposed rules for electric power plants. For China, the announcement is a signal that economic transformation remains the long-term goal. Both countries will need to overcome significant domestic resistance to achieve their stated goals but in our view the joint announcement strengthens the hands of both the U.S. and Chinese Presidents.
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