The future of the renewable energy industry is directly tied to the upcoming climate change negotiations at Copenhagen. If binding emission targets from big emitters are achieved, producers and installers of solar and wind technologies are looking to see a big growth in business. Although a binding international treaty appears unlikely, the heaviest emitters from both the industrialized and developing worlds (the U.S. and China, respectively) recently placed their opening bids.

While Americans celebrated Thanksgiving this past Thursday, the State Council of China announced that the country plans to reduce the intensity of carbon dioxide emissions per unit of GDP by 40 – 45% in 2020 from 2005 levels. This came a day after President Obama pledged the United States to an emissions cut in the range of 17 percent below 2005 levels by 2020 and 83 percent by 2050. And so the pre-Copenhagen negotiations dance has begun.

Experts are divided on China’s announcement. Some argue that it is a huge step in the right direction, while others believe it is too weak and will not significantly alter China’s projected emissions trajectory.

What is interesting about the two is the difference in language. The U.S. has identified an overall emissions cut, whereas China has pledged a reduction in carbon intensity per unit of GDP. So how do they differ? An emissions cut is an overall future cap on the total GHG emissions, regardless of economic growth. Carbon intensity, on the other hand, is used to tie the amount of emitted GHG directly to economic output. By identifying carbon intensity as the means to emission reductions, China is standing by the belief that economic development will come first and that emissions should be “curbed” instead of “capped.” For more details, this Q&A released by Reuters does an excellent job explaining China’s choice of carbon intensity.

According to the New York Times, some believe that carbon intensity goals are a complete distraction from overall emission reductions. John Watson, who chaired a National Academy of Sciences committee that examined energy futures and air pollution in urban China and the United States, argued that

You can have carbon emissions increase substantially, but carbon intensity still goes down. The real key for global warming is the absolute number, not that relative number.

And one thing that neither country has detailed is exactly how this will affect the global economy, which is still unstable after the Wall Street meltdown of 2008. China, and other rapidly developing nations, have argued that if a cleaner path of development is to be pursued, then the industrialized world must be ready to provide both technology and financial assistance. China has suggested a figure that would translate to a price tag of more than $140 billion for the U.S. alone.

The good news is the two countries that most needed to announce some form of emission reductions have started the dialogue before delegates meet in Copenhagen next week. Without the leadership of the U.S. and China, other countries are less likely to follow. We’ll be sure to keep our eye on the climate negotiations and how this situation develops, as the renewable energy industry is poised to seriously benefit from a carbon-conscious world.