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US and China's climate change agreement prompts calls for Australia to follow suit

China and the United States' agreement on a new set of ambitious targets to cap or reduce greenhouse gas emissions by 2030 has prompted calls for Australia to follow suit.

US president Barack Obama met his Chinese counterpart Xi Jinping for talks in Beijing and announced the joint agreement on Wednesday.

China agreed to slow and then stop its emissions by 2030 while the US said it would reduce emissions by up to 28 per cent by 2025.

Australia has committed to a 5 per cent cut in emissions by 2020.

Climate Institute environmentalist Erwin Jackson said the agreement showed how far behind the Australian domestic policy conversation was on climate change.

"We've been obsessed with 2020 targets, when the reality is that the rest of the world is now thinking ... significantly beyond that," he said.

Professor Matthew England from the Climate Change Research Centre at the University of New South Wales said Australia's economy would suffer unless a plan was developed for deeper emission cuts.

"We can't rely on fossil fuels locally for our power because of the levels of greenhouse gas emissions," he said.

"We need to move to renewables for this.

"But also we've got to take note that economies like China are going to start using less and less coal ... we have to keep emphasising the urgent need to reduce emissions."

Abbott and Hockey welcome deal

Prime Minister Tony Abbott said he welcomed the deal between the US and China, but said he was focused on Australia's Direct Action plan and cutting emissions now, rather than in 16 years' time.

He said China and the United States were the world's biggest polluters, while Australia contributed to just 1 per cent of global emissions.

Mr Abbott also said there were plenty of forums where climate change could be discussed, but said the focus of G20 was economic reform.

Speaking ahead of G20, Treasurer Joe Hockey also welcomed the deal.

"It is a good sign on many fronts. It is hugely important for the world that China and the US, as second largest and largest economies in the world, have a deep dialogue," Mr Hockey said.

"Of course climate change is hugely important, and of course climate change is both a risk and an opportunity to be dealt with when discussing the global economy, [but] there are many issues ... to help drive economic growth, and that will come from the structural reforms laid down before this [G20] meeting over the weekend."

Australia 'needs to take real action'

Opposition Leader Bill Shorten said it was time for Australia to match its major trading partners' efforts.

"The Australian Government needs to join the rest of the world, needs to join most Australian citizens and take real action on climate change, not their climate sceptics' policy they've got in place," he said.

"We are now irrelevant to the great economic debates of our age.

"While the United States and China show global leadership, Tony Abbott is sticking his head in the sand.

"At the G20 this week, Australia will hold the embarrassing title of being the only nation going backwards on climate change.

"Any argument for inaction, because the rest of the world isn't acting, is clearly false."

Former prime minister Paul Keating welcomed the US and China's deal, labelling the current Australian policy as "complete nonsense".

"I think it's highly desirable that we see an emerging, evolving agenda where China joins great states like the US in these global issues, whether it's nuclear non-proliferation, the global commons, the sea, the atmosphere," he told Lateline.

"This is unambiguously a good thing.

"[And] it shows what a complete nonsense policy the [Australian] Government has."

Environment Minister Greg Hunt said the Government would release its proposal for emissions cuts post-2020 in due course.

"This is the foundation stone for a good global agreement, and we want a good global agreement that brings on board all of the major emitters," he said.

"And we have to be part of that, we want to be part of that.

"We've always said that this is something we'll consider during the first half of the coming year after the Lima conference.

"Our position on that remains exactly the same."

Mr Hockey said Australia would set new targets before next year's conference in Paris.

"We will obviously be announcing a policy position in the lead up to the Paris summit," he said.

Rio Tinto boss lauds US-China climate deal

Rio Tinto chief executive Sam Walsh said the agreement was "exciting" and Australia needed to keep in step with what was going on elsewhere in the world.

Mr Walsh is currently in Brisbane for a meeting of top business leaders, the B20, ahead of the G20 leaders' summit later this week.

He said China and the US were setting the pace in terms of technology development around carbon emission reduction.

"Obviously, they have a vision of what they can achieve over the next 10 years and it's important that Australia play its part in this," he told the ABC's 7.30 program.

Mr Walsh pointed to the CSIRO's work on carbon reduction as an important Australian initiative.

Asked about recent comments by Mr Abbott that coal was "good for humanity", Mr Walsh agreed that coal would continue to be important, but said Australia also needed to focus on other renewable avenues, such as wind and solar.