Major step toward rules for global carbon market

Editor's note: Earlier this month, China, Brazil and the European Union — founding members of the Open Coalition on Compliance Carbon Markets — held the first high-level meeting of the coalition in Florence, Italy. Dong Xiucheng, executive dean of the institute for international carbon-neutral economy at the University of International Business and Economics, and Weng Yuyan, an associate researcher at the Institute of Energy, Environment and Economy at Tsinghua University, spoke to People's Daily Overseas Edition about the coalition's role in the development of a global carbon market. Below are excerpts of the interviews. The views don't necessarily represent those of China Daily.

Currently, the global carbon markets are characterized by uneven development and fragmentation. Countries have adopted different rules and standards for carbon pricing, and there are substantial barriers to cross-border carbon trading.

The establishment of the Open Coalition on Compliance Carbon Markets marks a significant step in implementing the consensus reached at COP30 in Brazil last year. The coalition aims to harmonize carbon market rules across countries, unify accounting standards, promote cross-border recognition of carbon credits, build a platform for policy discussions, share experiences in carbon market development, regulate international carbon trading and address the issue of market fragmentation.

The coalition's key focus areas include cooperation on monitoring, reporting and verification systems for carbon emissions, carbon accounting methods and rules for using high-integrity offsets.

The official launch of the coalition will promote the alignment of carbon pricing systems across countries, reduce regulatory conflicts and lower the costs of cross-border trading. This is aimed at establishing a fairer and more transparent global carbon pricing system.

The coalition will facilitate cross-border carbon trading, enhance coordination among countries in meeting their emissions reduction commitments and support the achievement of nationally determined contributions.

It will also accelerate the low-carbon transition of various countries through market-based approaches and guide the cross-border flow of green capital. By leveraging economic tools, the coalition will help the world achieve the temperature-control goals set out in the Paris Agreement, pool multilateral efforts for emissions reduction, and ultimately achieve the carbon neutrality target.

Carbon markets across the world have been designed differently. Given that developed and developing countries are at different stages of growth, the coalition adheres to the principles of openness, inclusiveness and voluntary participation. This approach promotes dialogue and cooperation among members on core aspects of carbon markets, helping to form a common framework for their development and further enhance global cooperation on carbon pricing.

The coalition will promote the effective implementation of Article 6 of the Paris Agreement by encouraging member states to coordinate on carbon emissions accounting and high-quality carbon credit standards. That China, Brazil and the EU — major economies from different regions — are working together to advance carbon market cooperation demonstrates their resolve to uphold multilateralism and jointly address climate change. This offers a new model for cooperation on global climate governance.

It is worth noting that members of the coalition differ in their carbon reduction foundations, economic development levels and available resources, which may pose challenges to the coalition's operations.

The international community needs to formulate unified rules for carbon accounting, carbon credit certification and trading. Developed countries should scale up technological and financial support for developing countries to narrow the gap between carbon markets in the Global South and Global North. Efforts should focus on expanding multilateral dialogue, encouraging more countries to join the coalition and improving the regulatory system for global carbon trading.