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A U.S.-China Breakthrough for the Planet — and New Economic Growth

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The forecast for climate change has been undeniably altered overnight — positive news for the planet and for economic growth.

U.S. President Barack Obama and Chinese President Xi Jinping, the leaders of the world's two largest economies and two largest emitters of pollutants into the atmosphere, demonstrated that, together, they are leading the global fight against climate change.

Their commitments are an absolutely essential first step if we are to hold the warming of the planet under 2 degrees Celsius, and avoid the disastrous consequences of an even more uncertain world. China committed to an emissions peak by 2030, with 20 percent of its energy coming from renewable sources, and the United States agreed to reduce its emissions by 26-28 percent below 2005 levels by 2025. Importantly, they agreed to expand their joint clean energy research and development.

At stake are the economic prospects of current and future generations. The costs to cities, coastlines and crops, as well as to the health and livelihoods of thousands, are mounting. But more than reacting to this reality, what China and the United States did was show the necessary determination to build a future based on low emissions through clean energy and livable cities because it makes sense for the environment and economies.

We have opportunities today to invest in clean energy innovation that will create jobs and grow stronger, healthier, more resilient economies. Our research shows that investing in climate-smart solutions such as clean transportation can reduce air pollution and grow jobs. And, today, we see that we have the leaders willing to get us there.

Presidents Xi and Obama's agreement could lead to a global economic and energy transformation. They pledged to strengthen cooperation in developing and expanding the use of clean energy and technology, including carbon capture and storage.

I applaud their emerging ambition and the timing of their statement. By coming out early and standing together, they are creating momentum as countries begin developing their emissions reduction plans on the path to a 2015 international climate agreement in Paris.

Still, the announcement, while extraordinary, is not enough. We need all of the world's major economies to step up. We must start at the national level with higher goals for renewable energy and energy efficiency. Governments must provide the policy signals that encourage private sector investment in clean energy — including renewable energy, energy efficiency, and carbon capture and storage. That includes pricing carbon and phasing out harmful fossil fuel subsidies.

The two presidents laid the critical cornerstone for global action toward an international accord in Paris next year. Now we call on others to build on their commitments.

This post originally appeared on the Huffington Post.


Jim Yong Kim

Former President, World Bank Group

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