Earlier this week, the US and China launched their first joint local weather settlement since 2021, reigniting the potential of cooperation between the world’s two greatest emitters of greenhouse gasses. Filled with promising language however mild on specifics, the so-called “Sunnylands Assertion” renews superpower cooperation, at the least probably, heading into COP 28 in Dubai. 

The settlement represents “extra of a political gesture of optimistic intent somewhat than an motion plan,” mentioned Taylah Bland, senior program officer for the China Local weather Hub at Asia Society Coverage Institute. “The Sunnylands Assertion serves as a sign that engagement on the problem of local weather change between each events has resumed and is on the correct path.”

Right here’s a breakdown of what enterprise leaders ought to know, and count on, from the brand new settlement.   

• The settlement says nothing about phasing out fossil gasoline demand. That implies that Western corporations hoping to scale back their Scope 3 emissions, and reliant on China for his or her uncooked supplies and provide chains, should look elsewhere for significant reductions in fossil gasoline burning in China, which continues to rely closely on coal, for its energy technology.
• The transition to renewable vitality is ready to speed up. Each nations agreed to pursue efforts to triple renewable vitality capability by 2030. Additionally they plan to restart the U.S.-China Power Effectivity Discussion board to “deepen coverage exchanges on energy-saving and carbon-reducing options in key areas together with trade, buildings, transportation, and tools.” Lastly, each China and the U.S. purpose to advance the event of at the least 5, giant scale CCUS initiatives by 2030, together with direct level seize from industrial and energy technology sources — which means that massive utilities, and the businesses reliant upon them, could profit from the controversial nature of CCUS and lengthen the lifetime of huge pure gasoline vegetation and carbon-intensive industrial processes. 
• Tackling plastic air pollution would require growing the round financial system. One of many shorter sections within the settlement, each nations mentioned that they’re “decided to finish plastic air pollution,” a well timed declaration given each events’ present engagement within the negotiations for a International Plastics Treaty in Kenya. Each nations have largely been silent or inactive on decreasing their use of plastics of their merchandise and on instituting significant plastic recycling packages. If nationwide governments move stringent laws that will have to alter.  
• Methane discount is lastly getting the highlight. Methane is a short-lived, extremely potent and sometimes neglected greenhouse gasoline, and the huge U.S. livestock and agriculture methods produce copious quantities of it. Numerous efforts are underway to deal with methane emissions, however giant ranchers and farmers have largely been in a position to keep away from the general public outcry that besets Massive Oil. The settlement clarifies that each the U.S. and China will interact in methane discount coverage dialogues transferring ahead, together with technical exchanges. The assertion additionally promotes “the deployment of applied sciences to reinforce synergy of controlling GHG emissions and air pollution, together with NOx, VOCs, and different tropospheric ozone precursors.” The U.S. and China additionally agreed to host a Methane and Non-CO2 Greenhouse Gases Summit at COP28.  
• COP28 simply received some tailwinds. Each nations recommitted to the objectives of the Paris Settlement, a step that some see as an indicator for the prospects of serious motion on the upcoming local weather convention. Massive U.S. company executives have lengthy appeared to multinational agreements and worldwide boards akin to COP for guideposts and instruments for tackling local weather change — expectations which have usually gone unmet. With the governments of China and the U.S., which frequently conflict in different areas, shaking palms on local weather motion, worldwide cooperation has entered a brand new period.    

The Sunnylands settlement establishes a runway for future collaborations. 

“The joint assertion by each local weather envoys offers a robust platform for each Xi and Biden to additional interact in proactive dialogue,” mentioned Bland, “and probably result in additional assertion or extra particular actions to be taken as we strategy COP28 and past.”