For the first time ever, the United States (US) and China have struck a deal to reduce carbon emissions on the eve of the G20 Summit in Brisbane.
The two countries account for 42 per cent of the world's emissions and it is the first time they have agreed to work together curb global emissions and tackle pollution.
US president Barack Obama, has agreed to double the pace of reducing emissions and committed to a drop of 26 to 28 per cent below 2005 levels before 2025.
"As the world's two largest economies and emitters of greenhousse gases, we have a special responsibility to lead the global effort against climate change," Obama said.
China has set a timeframe for its emissions promising to peak about 2030 at the latest and ensure 20 per cent of its power production is sourced from renewable energy by 2030. China's previous figure was 15 per cent.
Chinese president, Xi Jinping, is keen to encourage countries to make a commitment during climate change talks prior to climate talks in Paris in 2015.
"We agreed to deepen practical co-operation on clean energy and environmental protection," Xi said.
Environment Minister Greg Hunt said Australia is well on its way to meeting its target of reducing emissions by five per cent on 2000 levels by 2025. Although the government is trying to strike a deal with crossbench senators to scale back Australia's Renewable Energy Target.
The historic deal is threatening to overshadow the G20 Summit agenda this weekend despite the Prime Minister Tony Abbott's efforts to keep climate change in the background and off the main agenda.
Opposition leader Bill Shorten, said the Prime Minister is out of step with the rest of the world and sticking his head in the sand on climate change.
China's coal consumption is expected to increase by little more than one per cent this year, well down on the nine per cent average growth rates of the last decade.
China is currently trialling seven regional emissions trading schemes and is expected to announce the framework for a national scheme in the country's next five year plan which will run from 2016 to 2020.