Countries Unite to Build Fair and Transparent Carbon Market

Brazil brought together top leaders on 15 November to push forward a new global group called the Open Coalition on Compliance Carbon Markets, which was first announced on 7 November at the Climate Summit in Belém. So far, 18 countries have joined. The goal of this coalition is to create common rules and connect different carbon credit markets so that trading becomes easier, more reliable, and more transparent.

Brazil’s climate secretary, Maurício Lyrio, said this initiative is based on the recognition that compliance carbon markets play a central role in accelerating the decarbonization of our economies and in advancing the implementation of the Paris Agreement, our objective is to leverage compliance carbon markets while maintaining environmental integrity and ensuring a just transition for all.

The effort is being led by Brazil's Ministry of Finance. Deputy Secretary Rafael Dubeux elaborated that "We have been discussing how to move away from fossil fuels in a structured, orderly, and fair way. One of the keyways to achieve this is through a regulated carbon market." According to Dubeux, the coalition will have countries work together in outlining best practices for MRV, common accounting standards, and ensuring the integrity of offset mechanisms. He reinforced that regulation of the sector is among the most effective means of driving decarbonization. “This is truly a historic moment to accelerate the global effort toward decarbonization, equity, and prosperity”.

Expansion of the Coalition

During the meeting, representatives from several countries reaffirmed their support for the Open Coalition on Compliance Carbon Markets. The initiative now includes Brazil, China, the European Union, the United Kingdom, Canada, Chile, Germany, Mexico, Armenia, Zambia, France, Rwanda, Andorra, Guinea, New Zealand, Monaco, Singapore, and Norway.

The EU’s Climate Commissioner, Dan Jørgensen, said he supports the initiative and wants to work closely with Brazil and others to ensure strong and fair carbon pricing. He said, the use of high-quality credits must align with the standards and principles established under the Paris Agreement. The coalition can establish a benchmark to fully integrate relevant standards into final national targets and the design of domestic carbon markets.

Norway also formally entered the group. According to Norway's Climate Minister Andreas Bjelland Eriksen, Norway takes part in all important instruments for the reduction of emissions: the emissions trading system, the carbon market, and the Paris Agreement. He added that this coalition would support countries in sharing knowledge with each other and enhancing MRV and carbon accounting systems to make sure that climate actions will actually reduce emissions.

Source: UNFCCC