Open Coalition on Compliance Carbon Markets

• 1. A Coalition Strong Enough

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  "All that is needed is a coalition strong enough to move forward. If it includes Brazil, the EU, and China, it could encourage others to join." Those were the words of Rafael Dubeux, deputy executive secretary of Brazil's Ministry of Finance, describing the Open Coalition on Compliance Carbon Markets. The group is also known as the Climate Coalition. It was created at the United Nations climate conference COP30 in Belém, Brazil. Its goal is to bring the carbon pricing systems of very different economies into line with one another. How would such a system actually work? Which academics designed it, and what did they promise? Which countries stand to earn money from it, and which exporters could lose ground without it? And can a pledge made at a summit become a working institution?

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• 2. How The Cap Works

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  Net zero by 2050 is the destination of the plan's global emissions cap. The starting line sits at a level close to current emissions, and the ceiling then drops gradually year after year. Anyone carrying out an activity that generates emissions would have to buy allowances. As the cap falls, allowances become scarcer and their prices rise. That growing cost is meant to give industries a reason to decarbonize. A border adjustment mechanism would run alongside the cap, and all participants would govern it jointly. Lower-income countries may pay reduced amounts or be exempt from some costs. Part of the money raised would go toward their climate-related needs. The numbers behind this design came from a group of academics at Harvard University and MIT.

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• 3. The Academic Blueprint

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  A flagship report from the Harvard and MIT group became the theoretical base of the coalition. It proposes a carbon price floor of US$50 per tonne of CO2 equivalent for every member, paired with border carbon adjustment. According to the report, members would cut emissions seven times faster than they do today. It also projects roughly US$200 billion per year for clean-energy and social programs. Prices would rise moderately in certain industries, with minimal losses for producers.

  A second document, the Draft Proposal for a Unified Carbon Market, was written by the Carbon Markets Subcommittee and also backs the coalition.

  Research published in Nature adds a planetary measure. The current trajectory points toward 2.8 degrees of warming by 2100. The coalition, the research says, could close the gap between that path and the goals of the Paris Agreement, and it could redirect the money climate action needs. The catch is that it requires an appropriate political climate. Politics is also where the revenue question gets personal for individual governments.

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• 4. Who Collects The Revenue

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  Egypt tops the list at 3.6 percent. That figure is the share of overall government revenue the country could collect under a uniform price of 50 dollars per ton of CO2, in the report's modeling. China follows at 2.9 percent. India and Togo each come in at 1.9 percent, and Zambia at 1.6 percent. Those five are the only countries in the table above 1 percent. Indonesia and Mozambique each sit at 0.9 percent, Algeria at 0.6 percent, and Brazil, Cameroon and Thailand at 0.5 percent. Kenya reaches 0.4 percent, Uganda 0.3 percent, and Ghana trails at 0.1 percent.

  The modeling also tests a Graduated Price scenario, where prices differ by country. Under that version, only 4 countries would see revenue pass 1 percent of government income. Beyond the arithmetic lies the question of who else is already trying to build something similar.

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• 5. Cousins And Rivals

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  The G7's idea of a climate club is the closest relative of this coalition, and the two would work in a similar way. A separate Brazilian proposal for a forum on climate and trade, run through the UNFCCC and the World Trade Organization, is a different idea. One target of the coalition is to address problems linked to the EU Carbon Border Adjustment Mechanism.

  The Niskanen Center describes what members are doing after COP30 as working on mandatory carbon pricing frameworks. These would encourage domestic emission cuts and give exporters a competitive edge when facing border charges. The center sees a strong impact on the United States, because seven of those members account for more than two-thirds of U.S. goods exports. American industry is generally considered low carbon, but some policies of Donald Trump are quickly eroding that advantage. For exporters to keep it, the United States would need its own mechanism for cutting emissions. Meanwhile, the first countries were already signing up.

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• 6. Membership Takes Shape

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  By the 15th of November, 18 countries had joined, and the coalition was being counted among the main results of COP30. The European Union and China joined Brazil, along with the UK, Canada, Chile, Mexico, Armenia, Zambia, Rwanda, Andorra, Guinea, Monaco, Singapore and Norway. The early agenda was modest. Members planned to begin by sharing best practices in monitoring, reporting and verification, and in establishing common carbon accounting standards.

  On the 14th of January, the Council of the European Union approved the start of negotiations on a non-binding instrument. Discussion of its first step had been expected to begin on the 7th of January. The European Commission backed the coalition as a way to strengthen climate action and improve its international relations. The International Carbon Action Partnership planned to work closely with it, helped by Brazil's membership.

  In March 2026, the Climate Coalitions Working Group announced a turn toward practical implementation. It works directly with governments, policymakers and industry, including in Southeast Asia and Africa. Its tasks include advancing mutual recognition of carbon pricing systems and building tools for border carbon adjustment. It cooperates with the Coalition of Finance Ministers for Climate Action, and its aim is a "durable institutional architecture, aligning climate ambition with economic competitiveness."

  Cristina Fróes de Borja Reis, Brazil's extraordinary secretary for carbon markets, laid out a calendar during a webinar run by the international emission trading association IETA. Governance and rules were to be approved in May 2026 in Florence, then in China in the second half of the year, and finally globally at COP31.

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• 7. Florence Signing

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  On the 7th of May 2026, the European Union, Brazil and China officially launched the coalition in Florence, Italy. A signing ceremony and a constitutional meeting took place together. Kurt Vandenberghe, the European Commission's Director-General for Climate Action, attended. So did Li Gao, China's Vice Minister of Ecology and Environment, and Cristina Reis for Brazil. Li Gao said China was ready to work with all parties to develop the coalition into an "open, inclusive, pragmatic and efficient platform for international cooperation on carbon markets." The three signed the Terms of Reference, which set out the objectives, scope of work, governance structure and decision-making framework.

  Brazil will chair the coalition for its first 2 years, with China and the European Union as Co-Chairs. Reis said the project shows countries at different income levels are willing to cooperate. Representatives of Canada, Britain, Türkiye, France and others also attended and stressed that the coalition will be open, inclusive and voluntary.

  With the Terms of Reference adopted, the coalition is open to countries with compliance carbon markets. Subnational authorities that price carbon can join as observers. New Zealand and Germany became members, and several others are expected to follow. About 80 carbon pricing schemes operate across 50 countries, which is the pool of potential members. Next come a Secretariat and a work plan, due for adoption at the Carbon Market Conference in Wuhan, China, on the 15th of September 2026.

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