The growing relevance of BRICS to climate finance

This week, Brazil's Minister of Environment and Climate Change Marina Silva said the BRICS group, which began in 2006 as a club of Brazil, Russia, India, China, and later South Africa, has the potential to lead a just climate transition. “We represent around half of the world's population and 39% of global GDP,” she said during the 11th ministerial meeting of BRICS in Brasília, Brazil. “More than ever, the BRICS [countries] are increasingly fertile spaces for innovation, rich in cultural diversity, with strategic resources and an immense quantity and quality of natural capital.” The countries of BRICS have vastly different political systems, economic models, and geopolitical strategic interests. But sources tell Devex that BRICS is an especially unlikely alliance for climate action due to its members' conflicting economic priorities — China and India rely heavily on coal, Russia is a major fossil fuel exporter, and Brazil and South Africa face challenges balancing environmental goals with economic growth. But this year, Brazil’s BRICS presidency coincides with its presidency of the United Nations Framework Conference on Climate Change, or COP30, which some think puts BRICS in a position to lead the world on climate. “It is clear that there is a gap that is being developed by the U.S. by withdrawing from multilateral spaces,” said Gustavo Pinheiro, a senior associate at leading climate think tank E3G. “It’s very early to call, but as the U.S. becomes a more challenging partner, BRICS is growing in capacity.” He added that Brazil, especially is pushing cohesion in the group. BRICS+ is a group of 10 emerging economies. In addition to Brazil, Russia, India, China, and South Africa, it now includes Egypt, Ethiopia, Iran, the United Arab Emirates, and, as of January, Indonesia. They also have nine partner countries. Its name has changed from BRIC, to BRICS to BRICS+, but the group’s goal to increase its sway in the global order has remained constant. In recent years, it has been increasingly influential in the international community, expanding its membership in an effort to become a counterweight to traditional Western power players such as the U.S. and Germany. Over the years, the coalition has largely failed to achieve the unity that the father of the term BRIC, economist Jim O’Neill, envisioned when he coined the term about it in 2001. BRICS countries have frequently diverged on key issues. India opposed China's Belt and Road Initiative; there are border tensions between India and China; and Brazil has been reluctant to align with Russia and China on anti-Western rhetoric. But the recent overhaul of international aid and the global imposition of tariffs by the Trump administration have created an opening for the group and made membership more attractive. Since Jan. 1, Indonesia has joined BRICS as a full member, nine other nations were officially designated as “partner countries,” and some two dozen have either been invited to join (Saudi Arabia) or expressed interest in doing so (Turkey). The group has also built its own development bank, the Shanghai-headquartered New Development Bank, or NDB, which primarily lends to member countries. NDB, which the coalition agreed on in 2014, has a subscribed capital of $50 billion, — small compared to the World Bank’s International Bank for Reconstruction and Development, the world’s largest development bank, with its subscribed capital of $318 billion. The countries, notably Brazilian President Luiz Inácio Lula da Silva, had previously explored the idea of a “BRICS currency,” which raised eyebrows globally. It drew particular condemnation from then-President-elect Donald Trump, who threatened a 100% tariff on BRICS countries in December if they were to abandon the U.S. dollar as their trading currency. He repeated the threat in January. While that idea has largely dissipated, BRICS has discussed the use of local currencies for trade, rather than the U.S. dollar or other global currencies. The Trump administration currently has levied different tariffs for various BRICS nations — with 10% for Brazil, 26% for India, and 34% for China, and Russia left off the list entirely. But the threat, in recent months, had a uniting effect on BRICS, which may lead to a stronger alliance in the months ahead. Experts think that this could be the year that the otherwise quiet group rises to prominence in global policy, development, and climate change. “BRICS has been rising in relevance for the last decade,” said Subhi Barakat, head of global climate governance at the International Institute for Environment and Development, or IIED. “But we’re also seeing this escalating competitiveness and assertiveness of the global south in a more coordinated, organized way.” <iframe src='https://cdn.knightlab.com/libs/timeline3/latest/embed/index.html?source=v2:2PACX-1vQHxSiiQCg8jZeIkTEDO7gtI9WAga4arrx-WF6hSeLurqm6z5ahWybgRSBsOjaWiv0WaPuxDk6ch72_&font=Rufina-Sintony&lang=en&initial_zoom=2&height=700' width='100%' height='700' webkitallowfullscreen mozallowfullscreen allowfullscreen frameborder='0'></iframe> The world’s new climate club? The group holds a wide range of political values and views, but has managed to maintain its pact largely by avoiding the issues that they are likely to disagree on, such as human rights, democratic values, and climate change. “If you look at the group’s origin, their goal was to deliver one message: to challenge how global governance works under primarily investment leadership,” said Li Shuo, director of China Climate Hub, Asia Society Policy Institute. “BRICS as a group has not traditionally been very active in international environmental processes.” But this year, with Brazil in charge and the U.S. fashioning itself as a common enemy, the group seems more interested in confronting at least one difficult issue: climate change. “BRICS has been this very pragmatic alliance where countries would agree to disagree in a nice way and focus on things that they might have agreement to move forward,” said Pinheiro. But during the discussions at this week’s ministerial meeting, Pinheiro said he’s heard a lot of positivity. “After the first round, Brazil was very positive that there were no members who fought the agenda that Brazil presented,” he said. “In fact, there was a common understanding among all countries that BRICS had to occupy the space that was being left by the U.S.” BRICS has supported climate initiatives in the past: In the 2011 Sanya Declaration, the group stressed the need for equitable global climate policies and reaffirmed its commitment to the Kyoto Protocol. BRICS supported the Paris Agreement in 2015 and published the Delhi Declaration in 2021, which focused on renewable energy and sustainable finance. At the United Nations desertification conference in 2024, it submitted a joint statement and a draft text that helped get the final agreement through. Susana Muhammad, the president of the COP16 Biodiversity Conference this year, called the BRICS “bridge builders.” As climate programs lose U.S. aid funding, experts say that there is an opportunity for BRICS to fill this gap. “What binds these countries is their shared development experience,” said Li. “They see themselves as different from developed countries, their emissions are still growing, there’s a genuine need for capacity and resources from other countries.” But, he said, at the same time, they are in a unique geopolitical position to make an economic case for a green transition. “There is increasing alignment between climate action and the economic gain of many of these countries.” China is the largest exporter of renewable energy in the world. Exports of solar panels increased by one-third year on year in 2023, and Chinese exports account for 80% of the world’s solar market. It also produces over 70% of the world's lithium-ion batteries, which are used in electric vehicles. “We want to believe that BRICS is a multilateral group, but the weight of China is undeniable in the group, especially in economic terms,” said Pinheiro. Brazil also has a stake in the climate conversations as the leader of COP30. “Over the last 10 to 15 years, and even without them hosting COP, the Brazilians have always been very creative and sophisticated multilateralist thinkers in terms of how to approach the climate challenge,” said Barakat. Brazil is also a leader in renewable energy, with over 50% of its primary energy consumption coming from renewable sources, largely hydropower. For comparison, just over 11% of the United States’ energy consumption comes from renewables, lower than the world average of 14.56%. “Our overall impression now is Brazil seems to be playing a very active role in coordinating this group,” said Li. “They are leveraging their presidency of BRICS.” India has also been a loud voice on climate change, coming out strongly against the final agreement of COP29 for loosening the way climate funding is counted. In the meetings this week, India urged BRICS nations to unite on the “Baku to Belém roadmap”, a vague commitment defined at the most recent climate conference to mobilize $1.3 trillion in climate funding by 2035. But there may be more rhetoric than action. “There is a huge contradiction among the BRICS members regarding environmental issues,” said Diego Amorim Xavier, a researcher at the BRICS countries study group at the University of São Paulo. “Brazil tries to stand out in this regard, but at the same time continues to invest heavily in fossil fuels such as oil. China is one of the world's biggest polluters, but it is the one that invests the most in sustainability in its production chain. And recently, new members such as the United Arab Emirates and Saudi Arabia have their economies based on oil.” Russia, with its large oil reserves, and South Africa as one of the world’s most coal-dependent countries, might not be walking the walk, but they are talking the talk. Russia has been a strong voice behind the climate discussion over the years — presenting climate initiatives in 2024 and loudly contributing during the COP16 nature discussions. However, the country has stayed committed to its fossil fuel exports South Africa previously participated in the Just Energy Transition Partnership, or JETP, and established a Presidential Climate Commission to oversee South Africa's just transition. Barakat said that the most likely angle for the climate argument will be economic competition. “It's the relevance of these countries and their domestic industries related to climate change and decarbonization,” he said. “There is an economic dimension of climate change and climate leadership from the BRICS.” What’s next Experts are confident that BRICS is playing a bigger role in this year’s development and climate landscape, but they don’t know how long that will last. “One thing we’re trying to evaluate is whether this is just a phenomenon under Brazilian leadership. Or is it more systematic and for the long term?” said Li. “My personal assessment for now is that it’s too early to make a judgment call. At this point in time, I would say this is largely driven by Brazil.” There are also questions about how the rest of the world will perceive the group, Li said — whether the other BRICS countries will stand behind Brazil at COP30 and help push an agenda that middle- to low-income countries support, or take on a more antagonistic role in global conversations. “I wouldn't say it's a positive side effect of the Trump administration, but the fact is that BRICS members are seeing some value in staying together at this moment,” said Pinheiro.