Researchers from Harvard and MIT have proposed a global carbon pricing coalition designed to accelerate decarbonization across heavy industries. By establishing minimum carbon prices and implementing fair border fees, the plan aims to reduce global CO2 emissions seven times more effectively than current policies. The initiative could generate approximately $200 billion annually, providing critical funding for clean energy and climate adaptation in developing nations. With Brazil championing the proposal ahead of the COP30 summit, the coalition offers a coordinated framework to protect industrial competitiveness while meeting urgent climate targets.
The proposed framework focuses on four high-emission sectors: steel, cement, aluminum, and fertilizer production. Together, these industries account for more than 20% of global CO2 emissions. Under the coalition’s guidelines, member nations would implement a floor price for carbon emissions within their borders and apply fees to imports from non-member countries. This mechanism is intended to prevent “carbon leakage,” where businesses move to regions with laxer environmental regulations, and ensures that domestic industries remain competitive.
According to research modeling, the coalition’s impact would be transformative. Participating countries could see emissions drop by 650 to 770 million metric tons annually—a figure exceeding the total yearly emissions of Canada. Financially, the system would raise nearly $200 billion each year. While some revenue would come from border fees, the majority would be generated through domestic carbon pricing, creating a significant pool of capital to fund social programs and green infrastructure.
The plan offers two distinct pricing strategies to accommodate different economic realities. One model suggests a flat rate of $50 per ton, while a graduated system proposes $25 for low-income, $50 for middle-income, and $75 for high-income nations. The graduated approach is viewed as more politically viable, as it adheres to the principle of “common but differentiated responsibilities” by placing a lower burden on developing economies while still achieving significant climate goals.
Economic analysis suggests that the impact on consumers would be relatively modest. While raw material costs for steel and fertilizer could rise between 4% and 13%, the price increase for finished goods like automobiles or residential buildings would be significantly lower. Furthermore, industrial output in member countries is projected to decrease by less than 2%, indicating that the coalition would not trigger a mass exodus of manufacturing to countries without carbon regulations.
Brazil has already integrated this proposal into the agenda for the upcoming COP30 summit, hosting technical discussions with potential partners including China, India, and Canada. The initiative builds on a growing global trend, as 80 carbon pricing systems are already operational worldwide. By formalizing these efforts into a unified coalition, the plan seeks to replace the current patchwork of independent regulations with a transparent, verified system that encourages global cooperation and technological exchange.