At a time when the country faces new growth challenges as the pace of urbanization picks up, the question for China - as it is for the United States - is whether the next wave of growth will be smart and sustainable.

Smart growth means clean energy development and energy efficiency, it means reducing greenhouse gas emissions without reducing economic opportunity. It means understanding that clean air and water are central to the quality of life, and that no family should be asked to trade the health of its children for access to energy.

China and the US face common challenges: how to grow their economies, how to keep people productively employed, how to sustain and enhance the environmental gains that have already made, and how to overcome the opposition of vested interests that stand in the way of progress.

All too often those interests present us with a false choice - choosing between economic growth and environmental protection. We hear this daily in the US. But since Earth Day 1970, experience has taught us that these two values are not in conflict. The US is much cleaner and safer environmentally, yet far more powerful economically, than it was 43 years ago. The state of California has managed to keep its per capita energy consumption flat for more than 30 years while growing into one of the world's most dynamic economies - the ninth largest in the world.

Now China faces a similar challenge and a similar opportunity. It too can grow cleaner ecologically while growing more economically powerful. But it will take incentives to unleash the innovation economy that can deliver these.

The seeds of innovation are already being sown in China. As part of its 12th Five-Year Plan (2011-15), China has embarked on a bold experiment with carbon trading in seven pilot programs, which will eventually encompass some 250 million people. Innovation helped the US unlock its shale gas resources, which are delivering enormous economic and environmental benefits. Now China is also opening the door to shale gas development. The greenhouse gas emissions that drive global climate change are on the decline in the US, thanks to a new abundance of lower-carbon natural gas from shale formations. China has abundant shale gas resources, but strong technical assistance and careful oversight are required to develop these resources safely.

US Secretary of State John Kerry has worked tirelessly on behalf of environmental issues, and during his brief visit to China he devoted significant time to environmental issues. While he was in Beijing, the US and China announced a new task force on climate change in preparation for the upcoming Strategic and Economic Dialogue between the two nations, slated for July. Hopefully, this will be the beginning of fruitful bilateral environmental cooperation that leads to dramatic benefits for everyone.

He also found time to talk with the Beijing-based staff of the Environmental Defense Fund, a US-based nonprofit environmental advocacy group, about its work in China on green supply chains - the idea that environmental progress can be achieved through the joint efforts of both buyers and producers in the same supply chain in the course of their normal business. Kerry understands the power of aligning economic incentives so that people are rewarded for doing the right thing.

On Earth Day, let us reach out to each other in the spirit of cooperation, so that together both nations can prosper and enjoy the fruits of our labors in good health with blue skies, clear water, and a stable global climate.

Neither nation can succeed by itself. Together, we cannot fail.

The author is president of the Environmental Defense Fund.