Flashpoints | Environment | South Asia

The BRICS Climate Stress Test: India’s Opportunity to Reshape Global Climate Finance Architecture

BRICS is a climate-critical grouping whether it chooses to be or not.

A “family photograph” of BRICS leaders during the 17th BRICS Summit at Rio de Janeiro, Brazil, July 6, 2025.

In the span of two weeks in early April 2026, India delivered two climate signals that on the surface appear contradictory. It announced its 2035 climate targets – a 47 percent emissions intensity reduction and 60 percent non-fossil capacity by 2035 – which experts say it will likely exceed before the decade is out. Days later, India quietly withdrew its bid to host COP33 “following a review of its commitments for the year 2028.” The instinct is to read this as retreat. It isn’t. The more accurate reading is that India is rethinking climate forums, not climate ambition.

As one Indian analyst put it bluntly: hosting COP33 would mean “spending significant money and political capital to support a global process that, from India’s perspective, has not delivered fairly for the Global South.” For New Delhi, that price is no longer worth paying, and there is a growing acknowledgment that the leverage lies elsewhere. Increasingly, that means outside the United Nations system entirely, in the plurilateral groupings where the Global South sets the agenda rather than responds to one written elsewhere. 

Chief among them is the BRICS group, which India currently chairs. With 11 members representing nearly half the world’s population and 52 percent of global emissions, BRICS is a climate-critical grouping whether it chooses to be or not. This year also marks two decades of the bloc, and the theme India has identified for its presidency – “Building for Resilience, Innovation, Cooperation, and Sustainability” – signals intent. 

Strip away the diplomatic language and the climate crisis is, at its core, a capital allocation problem. Global climate finance stands at $1.9 trillion annually against a requirement of $7.4 trillion. Clean energy costs more than twice as much to finance in emerging markets as in advanced economies, while less than 8 percent of climate finance from the multilateral development banks reaches adaptation. 

The cognitive dissonance at the IMF-World Bank Spring Meetings – where the United States pushed to scrap the World Bank’s 45 percent climate finance target even as oil hit almost $120 a barrel amid the Iran-U.S. conflict – have only sharpened the case for an alternative. For BRICS members and other emerging economies, fossil-dependent supply chains and dollar-pegged currency systems are not just environmental liabilities, they are financial vulnerabilities.

Across BRICS, the clean energy transition is already underway, with wind and solar projects outnumbering planned fossil fuel plants two to one. What is missing is a joint financial architecture to match that momentum. India’s BRICS presidency is the opportunity to build it through two levers that move beyond declaration toward delivery.

Strengthening the NDB as the Global South’s Climate Bank

BRICS’s own New Development Bank (NDB) was built as an alternative to Global North-led Bretton Woods institutions. The NDB has equal-vote governance, no conditionality legacy, and a 40 percent climate finance allocation target. Its portfolio grew from $5.7 billion to $8.1 billion between 2023 and 2024, yet the bulk remains concentrated in middle-income BRICS members. At a time when Bretton Woods institutions are retreating from climate commitments, the NDB must step forward. 

As BRICS chair, India can push for accelerated deployment of three specific mechanisms. First, BRICS can amplify the reach of Project mBridge, the blockchain-enabled multi-CBDC platform developed by BRICS’ central banks, as a settlement layer for climate finance transactions, reducing dollar intermediation and transaction costs for cross-border green investment within the bloc. 

Second, India can push a formal framework for strategically utilizing Gulf Sovereign Wealth Fund co-investment in NDB climate projects. The UAE and Saudi Arabia manage over $2 trillion in sovereign assets; securing their participation through co-investment models is more durable than diplomatic pressures given the  bloc’s internal contradictions. For ASEAN partner countries like Malaysia and Vietnam, whose clean manufacturing supply chains depend on affordable transition finance, the strategic significance would extend well beyond BRICS itself. 

Third, accelerate the rupee bond program across BRICS currencies, leveraging India’s expertise in building large-scale, low-cost digital public infrastructure (DPI)........

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