COP30 Warns Against Irrationality in Global Climate Policy

As world leaders gather in Brazil for the COP30 climate summit, UN Secretary-General António Guterres called for urgent action to drive down global temperatures and keep the 1.5°C goal within reach.

I have been working on climate policy since the late 1990s and was present during Europe’s early carbon market discussions that helped shape the architecture underpinning the Kyoto Protocol.

That framework—built on international cooperation and market-based mechanisms—emerged when climate change was recognized as a global problem requiring global solutions. Despite its flaws, it had an underlying logic: collective action was essential, and market-based tools could deliver efficiency and scale.

Today, the mood has shifted. Public budgets are shrinking, geopolitical tensions are rising, and climate impacts are accelerating. Yet, we are witnessing a troubling rise in irrationality: the willingness to hold contradictory ideas simultaneously, even when the stakes are high.

For example, some claim that carbon “offsetting” is no longer possible under the Paris Agreement because countries now have emissions caps. This is a fundamental misunderstanding. Cap-and-trade systems, whether under the EU Emissions Trading System or international markets, rely on offsetting—compensating emissions reductions elsewhere rather than reducing them domestically.

Offsetting remains possible and desirable economically. The problem lies in credit credibility, uneven oversight, and lack of transparency in some market corners. The rational response is not to abandon the system but to strengthen guidance, increase transparency, expose malpractice, and ensure integrity throughout the value chain. High-integrity markets are challenging but achievable and already delivering results.

Evidence shows that international cooperation on carbon markets reduces costs compared to unilateral action, with potential savings of up to $250 billion by 2030. Walking away from these benefits would be self-sabotage.

The irrationality extends beyond markets. Policymakers acknowledge stretched public coffers and shrinking development aid, yet still suggest climate mitigation should rely primarily on public funds. The reality is stark: the world needs $8.4 trillion annually by 2030 for climate finance, but only $1.3 trillion was provided in 2021–2022, leaving a $7.1 trillion gap today.

Private finance is not optional—it is essential. Current external private climate finance is around $30 billion annually, but by 2030 it must rise to $450–500 billion per year. Mobilizing capital at this scale requires well-governed carbon markets.

What is needed is pragmatism, not purity. Deep emissions cuts, rapid removals, and massive capital flows must scale together. No single tool will solve the climate crisis; rejecting viable mechanisms because they are imperfect guarantees failure. Delay, not imperfection, is the greater risk.

Criticism plays a vital role, but when it becomes absolutist—dismissing markets or international cooperation—it becomes self-defeating. In a time of geopolitical instability, abandoning available mechanisms is the height of irrationality.

I do not claim to have all the answers. But cynicism is not a strategy, and delay is not an option. Well-governed markets, strategic public finance, and international cooperation remain indispensable. The future will be secured not by choosing one path and discarding the others, but by using every tool available and refusing to let irrationality drive inaction.

Pedro Barata is Associate Vice President, Environmental Defense Fund