US rollback on emissions authority collides with China’s first post‑pandemic CO2 dip

Two developments this week underscore divergent short‑term trajectories for the world’s two largest emitters. In Washington, regulators scaled back a federal agency’s authority to impose binding greenhouse‑gas controls on large emitters, narrowing one of the central tools available to drive national emissions cuts and shifting more weight onto states, markets and private actors. Across China, independent analysts concluded national CO2 emissions fell by roughly 0.3% year‑on‑year, the first contraction since the immediate post‑pandemic period. That modest decline appears driven by a mix of cyclical softness in heavy industry, adjustments in the power‑sector fuel mix and incremental efficiency gains rather than a single, sweeping policy change. Complementing the emissions estimate, Beijing has also directed major industrial facilities to disclose audited greenhouse‑gas outputs for the previous year, targeting high‑emitting activities such as petroleum‑chemical production, copper refining, commercial aviation and other energy‑intensive industrial sectors. The disclosure requirement — with a tight late‑March compliance window and third‑party verification expectations — is meant to populate the data infrastructure needed should China widen its emissions‑trading coverage. For firms the immediate effect will be administrative and compliance costs: improving metering, reconciling fuel and process inputs, and securing verifiers. For market designers, better, sector‑level data reduces concentration risks and can increase liquidity if allowances are expanded, but the disclosures alone do not guarantee strict allowance supply control or enforcement. Diplomatically, the juxtaposition is awkward: a major Western emitter is loosening centralized regulatory reach even as the other side both records a small emissions retreat and tightens transparency rules that could underpin market‑based measures. The practical global impact is mixed — China’s small decline slightly lowers projected near‑term CO2 growth, while the US rollback increases downside risk to future federal mitigation, potentially raising cumulative emissions over decades unless offset by subnational, corporate or international action. Analysts will watch industrial output, cement and steel production, power‑sector fuel shares and compliance outcomes from the new Chinese reporting mandate to judge persistence. In short, the week highlights how governance shifts and improved data can each move the climate needle in different ways; whether these signals mark durable change depends on follow‑through in enforcement, market design and policy restoration or reinforcement.