U.S.-China Climate Pact Opens Door to Green Energy Investment

NEW YORK (TheStreet) -- In a surprise move Wednesday, China and the U.S. agreed to join forces to reduce carbon emissions post-2020 and opened the floodgates for investment into greener, low-carbon energy.

The agreement represents a historic level of cooperation on the subject of carbon reduction and is an attempt by China and the U.S., the top two biggest producers of CO2 on the planet, to respond to scientists' calls for action by establishing leadership in the fight against global warming. 

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With the U.S. now pledging to reduce net greenhouse gas emissions by 26% to 28% below 2005 levels by 2025 and China vowing to consume 20% of its energy from zero-emissions sources by 2030, investment opportunities in nuclear, wind, solar and geothermal power could be quite enticing. 

In an Op-Ed for The New York Times, U.S. Secretary of State John Kerry wrote that the new U.S. emissions for 2025 build on President Barack Obama's plan to cut emissions 17% below 2005 levels by 2020.

Although wind production has tripled, and solar output has grown by a multiple of 10 under the Obama administration, nuclear and geothermal areas have lagged. 

Opportunities to fight carbon are certainly plentiful, but challenges remain.

For one thing, the U.S. can't be energy independent and simultaneously win the war on carbon. Something has to give.

This country simply doesn't have enough clean domestic energy supply to produce electricity if it abandons domestic coal and simultaneously closes perfectly good nuclear plants. Instead, the U.S. needs more nuclear power, as its use won't add to carbon emission output. 

Additionally, the idea that carbon emissions should be cut more stringently is already being opposed by the next Senate Majority leader Mitch McConnell, who said last week after the mid-term elections in Kentucky's coal country that he felt "deep responsibility to try to do whatever I can to get the [Environmental Protection Agency] reined in" and stop the regulating of carbon emissions at coal-burning plants.

Considering that a third of the CO2 emissions in the U.S. are derived from existing power plants, his war against EPA carbon rules means that in order for the U.S. to achieve more aggressive emissions goals, nuclear and geothermal power need to play a bigger role in the country's energy mix. 

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