The release of Australia's Climate Commission's "The Critical Decade: Global Action Building on Climate Change" report Monday coincided with the opening of the latest round of international climate change talks in Bonn, Germany.
China's total investment in clean energy in 2012 was $65.1 billion, 20 percent more than the year before.
"This was unmatched by any nation and represented 30 percent of the entire (Group of 20) nations' investment in 2012," the report states.
Still, China faces "multiple drivers for domestic climate action," the report points out, including reducing air and water pollution, limiting risks from climate change, improving energy and water security, enhancing the competitiveness of its economy and becoming a global leader in advanced energy technologies.
China has pledged to reduce emissions per unit of gross domestic product by 40-45 percent, relative to 2005 by 2020.
While China's growth in electricity demand and the use of fossil fuels is expected to continue over the next two decades, the report says, China's annual growth in demand for electricity slowed from around 11 percent to 5.7 percent in 2012.
"After a doubling of electricity demand over the last decade, this is a substantial achievement," the report states. "If China continues to reduce its growth in demand for electricity and fossil fuels it could curb its emissions growth sooner than previously expected."
Within the next few months China will establish seven trial emissions trading schemes, and the government aims to have an emissions trading scheme in place for the country by 2016.
The report also says that the United States is on track to achieve its target of a reduction of 17 percent below 2005 levels in greenhouse gas emissions.
China and the United States together emit about 40 percent of global greenhouse gas emissions.
The report applauded the China-U.S. "Climate Change Working Group" announced during U.S. Secretary of State John Kerry's visit to China this month.
Tim Flannery, chief climate commissioner of the Climate Commission and a co-author of the report, in a commentary in The Conversation said the two countries are taking steps to become global leaders in climate action.
"However, all countries must move beyond their current commitments to reduce emissions," Flannery wrote. "This is the critical decade to turn the global emissions trend downwards and to set the global foundations for our future."