COP30 Reflections: Key Takeaways for the U.S. Private Sector

COP30 wrapped up on November 22nd after a tense final stretch of difficult and often fractious negotiations. The final text commits to tripling adaptation finance and launches new voluntary mechanisms to support a just transition. Some countries showed a willingness to move toward more ambitious climate action in smaller coalitions. Yet many observers also flagged major shortcomings. Notably, the final agreement avoids any direct reference to fossil fuels or a pathway for transitioning away from them.

In this Q&A, Sanjay Patnaik, Director of the Center on Regulation and Markets, Bernard L. Schwartz Chair in Economic Policy Development, and Senior Fellow in Economic Studies at the Brookings Institution, helps unpack the key outcomes from COP30. He discusses what was achieved, what remains unresolved, and how U.S. companies should interpret the signals coming out of Belém.

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1. What were the most significant outcomes from the COP30 negotiations, and which are likely to have the greatest impact on the U.S. private sector?

I think the difficulties among countries at COP30 to reach a final agreement during the last days of the conference highlight the significant challenges for countries to coordinate a forceful response to our common climate problem.

For someone who has followed the COP convenings for a long time, it was not surprising, but it shows that the outcomes of these conferences often provide more high-level direction to countries rather than specific, globally enforceable policy changes. However, the proposal by Brazil during COP30 to establish a group of countries willing to integrate their carbon markets is significant and exciting.

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2. In terms of enabling meaningful progress on climate action, where did COP30 deliver real wins and where do gaps remain that American business can help close?

I think the aforementioned proposal to form a club of nations willing to harmonize carbon markets and agree to common standards for project-based carbon credits is significant.

If we look at global climate policy over the past 20 years, the most significant and impactful policies emerged bottom-up from nation states (or regions like the EU) rather than an enforceable global agreement. The proliferation of carbon markets is one example that can lead to clear climate impacts if countries manage to connect their markets and make tradeable carbon credits interchangeable and mutually recognizable.

The Brazilian plan has the potential to achieve this, which could lead to organic growth of an expanding international carbon market from the ground up. U.S. businesses should be supportive of these market-based efforts to reduce greenhouse gases.

3. How do you expect these outcomes to influence corporate decision-making—from investment priorities to operational strategies—in the year ahead?

I think most of the COP30 outcomes will not directly influence corporate decision-making in the short- to medium-term, especially since there are so many other competing priorities for executives right now (e.g., inflation, geopolitical tensions, AI disruption, etc.).

Moreover, the environmental regulations and policies that most firms are focusing on are national (or regional in the case of the EU) since they have to comply with them. However, if the proposed integration of carbon markets advances over the next year, more companies will start focusing on these markets and their own emissions. This has the potential to change their investment decisions in the long run.

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4. How did the absence of a formal U.S. delegation influence the negotiations, and what risks or opportunities does that pose for U.S. companies?

I think the fact that there was no formal U.S. delegation at COP30 led to the U.S. playing a smaller role than it would have in the past. This enabled other countries and regions to be more salient and highlight some of the topics important to them. For U.S. companies, this poses more risks than opportunities since other governments are more likely to drive some of the policies and regulations globally, which also affect U.S. companies (especially multinational ones).

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5. How do you see climate ambition intersecting with competitiveness and innovation for U.S. companies in the wake of COP30?

I think what U.S. policymakers and companies should consider is that, regardless of what happens to climate policy in the U.S., the world is moving fast towards decarbonization and a clean energy transition. This trend will continue, leaving countries and companies with a clear choice: invest in new technologies and industries to stay at the forefront of innovation or be left behind.

One of the core strengths of the U.S. economy and business environment has been that our firms are excellent at innovating and leading the world in the development of new technologies. It is essential that we maintain these advantages in the new, clean energy industries of the future as well. 

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6. If you were advising a U.S. company’s board right after COP30, what actions or priorities should rise to the top of their agenda for the year ahead?

I always like to tell companies that they should treat climate change as an economic issue and a risk management problem. This shifts the conversation away from more fuzzy concepts like sustainability or corporate social responsibility towards what matters for core business operations: minimizing risks and making a company more resilient.

This is even more important in a world where we see some countries and regions of the world rapidly advancing their energy transition while others are putting on the brakes, and where climate change becomes a multiplier for other risks (e.g., geopolitical).

So, I would focus on assessing vulnerabilities to direct climate risks (e.g., extreme weather events) and regulatory risks, and work on preparing the company to mitigate those risks as much as possible.