Harvard and MIT propose global coalition to accelerate industrial emission cuts and raise funds for decarbonisation

Researchers at Harvard and MIT have outlined a proposal for a voluntary international carbon‑pricing coalition targeting heavy industry that, they say, could sharply increase emissions abatement while generating substantial public finance for decarbonisation and just transition measures.

According to the report by the Global Climate Policy Project at Harvard and MIT, the scheme focuses on four energy‑intensive sectors, steel, cement, aluminium and fertiliser, which together account for more than 20% of global CO2 emissions. Using detailed plant‑level data from nearly 3,500 facilities, the modelling found that coalition members would reduce emissions roughly seven times more than under current policies, cutting some 650–770 million metric tonnes of CO2 annually, more than the annual emissions of countries such as Canada. The researchers estimate the coalition would raise nearly $200 billion per year, mostly from domestic carbon pricing rather than border fees.

Two design options were modelled. One applies a uniform floor price of $50 per tonne across member countries; the other uses a graduated scale tied to income, with $25 per tonne for low‑income, $50 for middle‑income and $75 for high‑income countries. Both approaches deliver similar aggregate emissions reductions, while the graduated option is presented as more politically feasible for developing economies and less disruptive to their industrial output.

The coalition would require members to set a domestic minimum carbon price for specified industrial emissions and to apply fees on imports from non‑member jurisdictions to avoid competitive distortion. Industry‑level modelling suggests limited output impacts inside the coalition: production of the targeted commodities would fall by less than 2% for members, and raw‑material price effects on consumers would be modest, steel up 4–6%, aluminium 11–15% and fertiliser 10–13% relative to current policies, diluting further once embedded in final goods.

The proposal is explicitly presented as a mechanism to overcome the classic collective‑action problem in climate policy, where the global benefits of abatement are shared but national costs are concentrated. According to the report, revenue could finance clean energy deployment, adaptation, social support for affected workers and trust funds at development banks to subsidise clean technology uptake in poorer members. The authors also flag the potential role of high‑quality offsets from forest conservation and carbon removal, while stressing the need for strict quality controls to preserve credibility.

Governance and verification are treated as core implementation challenges. The plan calls for transparent, independent reporting of industry‑level emissions and robust procedures for calculating and administering border fees; the researchers note that building monitoring capacity and verification expertise in participant countries will be essential.

The proposal has been folded into diplomatic efforts around the 2025 UN climate conference. According to Harvard’s Salata Institute and the institutions’ press releases, the Global Climate Policy Project published its flagship roadmap in September 2025, and Brazil placed the concept on the COP30 agenda for November 2025, hosting technical sessions in the lead‑up to the summit. Brazil has separately advanced initiatives to integrate carbon markets: its COP30 presidency convened discussions on an Open Coalition on Compliance Carbon Markets and, at the Belém summit in November 2025, related Brazil‑led proposals reported endorsements from a growing number of countries. Brazilian government statements said the market‑integration effort secured support from multiple states and aims to harmonise standards and boost liquidity and transparency across credit trading systems.

Industry and trade ministries would need to coordinate closely for the coalition to function, the report notes, and the private sector and multilateral finance institutions would play key roles in scaling technology transfer and financing. The researchers argue the coalition model could also head off a fragmented future of unilateral border adjustments and incompatible compliance regimes, a scenario that policymakers in jurisdictions such as the European Union are already confronting with their own border carbon mechanisms.

For industrial decarbonisation practitioners, the proposal offers a pragmatic route to concentrate policy effort where abatement is hardest and emissions intensity highest, while generating sizeable and predictable finance. The report emphasises gradual expansion: starting with the four targeted industries and an initial cohort of committed countries, the coalition could broaden sectoral coverage and membership as implementation systems and trust mature.

The plan acknowledges political hurdles, especially for lower‑income countries and trade partners that fear competitiveness impacts. To address this, the graduated pricing option, coupled with technology transfers, training and targeted finance from coalition revenues, is presented as a means to respect the principle of “common but differentiated responsibilities” embedded in international climate diplomacy.

If adopted and scaled, the coalition model would shift how industrial emissions are priced and traded globally, but its success depends on practical details, verification, border‑fee design, use of revenues and the willingness of major emitters and trade partners to align policy. Industry data and the report’s plant‑level analysis underpin the case that coordinated pricing can cut emissions at limited cost to production and with material revenue for decarbonisation, yet real‑world politics and implementation capacity will determine whether the concept moves from roadmap to reality.