Reports from the 30th Conference of the Parties in Belém, Brazil were notably mixed. However, last year’s annual conference proved to be a testing ground for voluntary coalitions of nations interested in carbon pricing policies.
US coverage of the 30th annual Conference of the Parties (COP30) climate conference in Belém, Brazil, was muted. The Trump administration did not send an official delegation, and not one American TV news network sent cameras. Further, the coverage that US audiences actually did get generally highlighted the disappointments: 10 years after the groundbreaking COP21 in Paris, no comparably significant agreement arose this time around—only an oblique reference to a phaseout of fossil fuels in the final text—and an actual fire broke out at one of the pavilions.
However, disappointment is largely a function of where you set your expectations. The conversations at the COPs have shifted from pursuing high-level goals to actually implementing those goals. Implementation is hard, because it entails concrete action. From this perspective, the work of the COPs has become more focused and difficult. Implementation also is something that must happen country by country. Any evidence that countries are implementing stringent policies that lead to actual emissions reductions offers encouragement that progress is being made toward the goals of the Paris Agreement. Our expectations should shift accordingly.
Some policy options seem to hold more promise than others. Carbon pricing remains globally relevant; the World Bank reported in 2025 a jump of 4 percentage points in the fraction of global emissions subject to a carbon price, from 24 percent in 2024 to 28 percent in 2025. That report also highlighted that India, Turkey, and Brazil (the latter of which hosted COP30) have all passed legislation to implement carbon prices in the coming few years. Together, these countries account for 21 percent of the world’s population and 12 percent of global emissions. The United States is also responsible for 12 percent of global emissions, yet remains the only developed economy without a national carbon price.
Accordingly, carbon pricing and related policies were much discussed at COP30. Driving much of the recent global activity in carbon pricing is the European Union’s Carbon Border Adjustment Mechanism (EU CBAM). A little over a month after the close of COP30 (on January 1, 2026), the EU CBAM entered its definitive phase, when importers of iron and steel, aluminum, fertilizer, electricity, hydrogen, and cement must pay for the carbon content embedded in those goods, with the fees linked to what producers in the European Union need to pay under the EU Emissions Trading System. Previously, importers of such goods had to report on—but not pay for—the embedded carbon emissions. Some countries are unhappy about CBAM and similar policies, though work from Resources for the Future (RFF) has linked the recent global surge of interest in carbon pricing policy to the EU CBAM.
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EU officials highlight that the best-case scenario would be that the EU CBAM doesn’t produce one cent of revenue for the European Union, because every country has its own carbon price that exempts it from the EU CBAM. EU officials argue that the recent surge in carbon pricing policies is evidence that the program is already having additional environmental benefits.
In Belém, Brazilian officials led an effort toward an open coalition on compliance markets. (“Compliance markets” include emissions trading systems and carbon taxes, but also the international carbon market mechanisms of the Paris Agreement.) Right now, the coalition’s agreement is 400 words and is fairly high level. It says nothing about trade, but covers monitoring, reporting, and verification; climate accounting; and capacity building for members of the coalition. The 18 signatories to the agreement include a remarkably diverse set of countries, both in terms of geography and economic development, accounting for 40 percent of global emissions. However, these signatures by no means guarantee the coalition’s success over the next few years.
One driver of success could be “interoperability”—the idea that the bureaucracy and technical systems of each nation in the coalition can work together on such a large and intricate operation. RFF researchers have written about the importance of interoperability, especially with regard to the quantification of carbon intensity at the product level, over the past two years. RFF research also has examined how interoperability links to debates about reforms to carbon accounting. The coalition’s emphasis on technical matters ahead of more general alignment on policy design shows how interoperability is not the same as policy harmonization. Given the infeasibility of a large, diverse group of countries adopting the same climate policy designs, a more proportional approach is appropriate. Nevertheless, as RFF’s analysis shows, even agreement on technical issues can be politically challenging if they affect the incentives of a given climate policy design.
The underlying dynamic of the coalition is arguably twofold: besides the growth in national and subnational carbon pricing policies, after more than a decade of negotiation, the international carbon market mechanisms of Article 6 of the Paris Agreement are now starting to come to fruition. But questions persist on the role of these market mechanisms in carbon mitigation that need to be answered before the mechanisms can truly hum. Besides the type of underlying carbon mitigation activities, how to integrate carbon “offsets” into larger compliance climate policies (like a domestic emissions trading system) is a key strategic policy question that can affect demand for carbon-offset projects. Such offsets may be generated within the context of compliance or voluntary carbon markets and are integrated to varying degrees, depending on the system. Last year, both California and the European Union announced that they will accept offsets in the future.
The fact that we are seeing greater global interest in carbon pricing could also lead to greater concern about the competitiveness of covered producers, especially for those in trade-exposed industrial sectors. Policies responding to competitiveness challenges, such as CBAMs, may be perceived poorly in countries affected by such policies. To mitigate some of this concern, the Brazilian COP Presidency launched the Integrated Forum on Climate Change and Trade. This new forum is another example of a plurilateral initiative, open to any country supporting its aims, to discuss the interplay between climate and trade policy outside of the official agendas of the United Nations Framework Convention on Climate Change and the World Trade Organization.
The fact that we are seeing greater global interest in carbon pricing could also lead to greater concern about the competitiveness of covered producers, especially for those in trade-exposed industrial sectors.
The forum will not propose new rules nor even discuss specific national policies. Nevertheless, the emphasis on inclusive economic growth echoes the coalition’s interest in equity. Indeed, some tension exists between climate and trade when thinking about equity. The foundation of modern international trade policy is that countries should, in principle, be treated the same. (Many caveats apply, given the ubiquity of preferential trade agreements.) In international climate policy, conversely, acknowledgement of each country’s differences is built into the policy architecture.
Like the coalition, the forum also includes interoperability and carbon accounting among its priorities. While some concern has come up about overlapping venues and initiatives pursuing similar agenda points, the initiatives from COP30 show how real climate action could be supported over time through incremental, sometimes technical, cooperation based on different groups of countries organizing in a “variable geometry.” If successful, this geometry might yet be more meaningful than painstakingly negotiated text on fossil fuels, which still leaves unresolved the question of how those ambitions would be implemented across the world.
These two Brazilian-led efforts are intriguing in part because of the contrast they provide to the overall COP process. They seek to engage coalitions of the willing, a strategy that contrasts sharply with the often tortured, consensus-based process for arriving at every single word of each COP’s final text. Framed in this way, we see reason to feel optimistic after last year’s COP, especially when viewed through the lens of carbon pricing.
