COP30: Coalition of the Un(willing)

On Friday, November 21, COP30 in Belém ended with a compromise reached during nighttime negotiations that lasted until Saturday. Given the geopolitical tensions that divided parties at this year’s climate conference, it was crucial to reach a unanimous agreement, even if it fell short of collective expectations. Positive outcomes include a commitment to increase climate finance to $1.3 trillion annually by 2035, a pledge to double support for climate adaptation in developing countries by 2025 and triple it by 2035, and progress on operationalising the Loss and Damage Fund, which was established to help countries cope with climate damage that cannot be avoided through mitigation or adaptation measures.

Nevertheless, there was widespread disappointment that the opportunity to address the root causes of the climate crisis had been missed. More than 80 countries, including EU member states, small island states, and some Latin American countries, had advocated for a roadmap to phase out fossil fuels. However, the inclusion of this initiative in the Global Mutirão Decision, the major political agreement reached at COP30, was blocked by countries such as Saudi Arabia, Russia, and India, which rejected any binding commitment to phase out fossil fuels globally. In addition, although the conference was held in the Amazon region, no binding language on ending deforestation was included in the Global Mutirão Decision. Negotiations on both issues are now to be continued on a voluntary basis outside the UN process.

Voluntary instead of unanimous action?

Indeed, many voluntary measures were proposed at COP30. For instance, the Tropical Forests Forever Fund, launched by the Brazilian presidency, has expanded to 53 countries and now totals $5.5 billion, with at least one-fifth of the funds earmarked for Indigenous peoples and local communities, and the Belém Health Action Plan addresses climate-related health risks with $300 million in philanthropic funding.

Other notable coalitions formed around the future of carbon markets, among them the Declaration on the Open Coalition on Compliance Carbon Markets, led by Brazil’s Ministry of Finance and currently supported by 18 parties, that aims to improve cooperation and interoperability between carbon pricing systems. The goal is to promote common principles for credibility, transparency, and the issuance of high-quality carbon credits. Similar to previous initiatives, this is intended to create conditions under which different emissions trading systems (ETSs) and carbon tax systems can work together more effectively, thereby reducing fragmentation.

Addressing carbon market fragmentation

A report by the Global Climate Policy Project at Harvard and MIT, which served as the basis for the initiative, argues that climate policy, carbon pricing, and international trade are closely intertwined and that fragmentation of markets would undermine both climate goals and economic stability. The report, as well as previous research conducted under the EUI-led Life Coase project, proposes that countries work together in a climate coalition to coordinate carbon pricing, support emerging economies, and manage emissions associated with trade in goods. This approach could reduce the need for countries to impose their own trade barriers and better manage the impact of national climate policies on global trade.

This topic was particularly relevant in the run-up to COP30, where the European Union’s Carbon Border Adjustment Mechanism repeatedly sparked discussions about fairness and international cooperation. Many developing countries express concern that unilateral border adjustments could effectively become trade barriers or shift the responsibility for decarbonisation to producers with limited resources. These concerns have heightened interest in cooperation frameworks that could provide clarity and avoid trade tensions. While CBAM was not specifically discussed at COP30, the issue of emissions embedded in traded products has received great attention, with the Brazilian presidency proposing a separate dialogue on trade.

High integrity as a precondition for integration

The momentum toward a more connected carbon market was also evident in the official UNFCCC side event organised by the EUI, the International Carbon Action Partnership, the German Emissions Trading Association, the Seoul International Law Academy, the World Union of Small and Medium Enterprises and Tsinghua University, which took place on 18 November. The discussion examined the rapid expansion of ETSs in major economies and emerging markets, alongside the evolution of existing systems as they align with net-zero goals.

The speakers noted that most systems now permit some use of emission credits, even though under strict conditions, and that demand for high-quality certification methods is on the rise. Other topics of focus included developments in China and Korea, the challenges faced by small and medium-sized enterprises in accessing carbon markets, and the importance of fair compensation for Indigenous communities. Panellists agreed that cooperation, credible standards, and regulatory harmonisation are essential to achieving a meaningful level of interoperability between systems. It remains to be seen if climate coalitions can pave the way for broader international cooperation in this regard.