The U.S. and China together burn almost half of the world's coal, but the countries are planning on working together to battle climate change.
The effort hopes to create technology to trap carbon dioxide emitted from power plants and fight global warming in general, Bloomberg reported.
China alone makes up 23 percent of the world's greenhouse gas emissions. The U.S. is the second largest contributor to global emissions, coming in at 19 percent, according to the Environmental Protection Agency's (EPA's) website.
The decision was made during the U.S.-China Strategic and Economic Dialogue. The nations will work together to "implement large-scale, integrated demonstration projects aimed at capturing, utilizing or storing carbon dioxide," Bloomberg reported.
"These demonstrations will engage companies in both countries and allow for enhanced trade and commerce," a report from the U.S. state department said.
"There is no question that China and United States together are the two most important players," U.S. Special Envoy for Climate Change Todd Stern told reporters "So anytime the U.S. and China cooperate and find a means of cooperating and acting together, I think it has a very positive overall impact on international negotiations."
President Obama has made the climate change issue a priority, especially in regards to carbon-dioxide emissions from power plants.
"Ambitious domestic and cooperative action by China and the United States is more critical than ever," the State Department said in the statement. "The United States and China recognize that there is significant scope for reducing emissions and reducing costs through comprehensive efforts to improve energy efficiency."
The agreement between China and America shows potential to "reach a breakthrough with regard to a binding global deal," Germany's Environmental Minister Peter Altmaier said.
Other leaders in greenhouse gas emissions are the "European Union, India, the Russian Federation, Japan, and Canada," the EPA reported. Together these regions produce 72 percent of global carbon production.
