China accounts for more than 50% of the world’s total coal consumption.

The Chinese government aims to cut carbon dioxide emissions by as much as 17% per unit of gross domestic product in its five-year plan through 2015, according to a statement released by the National Energy Administration.

According to leading economists there is a big risk of investors overestimating the long-term value of coal production.

HSBC, Citigroup and many others argue that in today's market, fossil-fuel reserves are dramatically overvalued.

The world's governments have pledged to limit global temperature rise to 2C.

To reach that target USA Today predicts 60-80% of global fossil-fuel reserves will have to remain unmined.

However, mining companies, coal exporters and institutional investors are not taking this into account when making investments.

Markets are betting against governments coming through with carbon-reduction policies in the coming years.

The main cause for concern is that China’s previous history suggests reducing carbon-emissions is something the government intends to follow through with.

China demonstrated its commitment to carbon reduction by launching the world's second-largest carbon trading exchange in Guangdong in advance of a national rollout in 2015.

That is bad news for the likes of Queensland and New South Wales. Coal-producing US states such as Wyoming, West Virginia and Kentucky will also be hit hard if China does reduce is coal usage, potentially suffering major job losses as mining declines

Big investors such as pension funds typically have significant holdings in fossil fuels and failing to amend their investment plans to incorporate climate risk could hurt them.