BRICS is putting capital behind climate action

Editor's note: Lu Jiajun is a researcher at the Academy of Financial Research and an assistant professor at Zhejiang University International Business School. Zhu Yueteng is a researcher at the Academy of Financial Research and an assistant professor at School of Economics at Zhejiang University. The article reflects the authors' opinions and not necessarily the views of CGTN.

Against the backdrop of the 2026 BRICS Summit's relatively low-key outcomes in New Delhi, one of the more consequential developments was China's call to reform the international financial architecture and give developing countries a greater voice.

The most tangible expression of that reform is green finance, which was a central focus of the summit rather than a side issue. It sits at the heart of the "sustainability" pillar that India, as this year's chair, placed alongside resilience, innovation and cooperation.

The New Delhi Declaration called on developed countries to provide "additional, adequate, predictable, accessible" financial resources, while flagging the debt burdens that already constrain climate and development investment across the developing world. 

It paired that with a call for coordinated action on debt sustainability and fiscal space, acknowledging that climate finance cannot be disentangled from the broader reform of an international financial system weighted against borrowers.

The diagnosis is familiar, and it is getting worse rather than better: The rich world's promise of $100 billion a year in climate finance, first made at Copenhagen in 2009, was not met until 2022, and roughly 70% of what eventually flowed arrived as loans, much of it non-concessional, adding to the very debt the declaration now names. 

At COP29 in Baku, the replacement target, a floor of $300 billion a year by 2035 with an aspirational $1.3 trillion from all sources, was dismissed by India's negotiator as "a paltry sum." 

The skepticism is justified: developing countries' needs are estimated at $5.1 trillion to $6.8 trillion by 2030, while adaptation finance, which they have long prioritized, mobilized only about $28 billion in 2022 against an estimated need of $215 billion to $387 billion a year.

This is the gap a bloc of 11 members, more than 45% of the world's population and close to 37% of global GDP, is now signaling it will no longer simply wait for the incumbent system to close.

A bank, not a lecture

The instrument is the New Development Bank, the BRICS-backed lender founded in 2015 that is quietly becoming an alternative source of finance for clean-energy and digital projects. 

By mid-2026 it had approved 141 projects worth about $44 billion, and climate finance reached a record 57.1% of its 2025 approvals, well above the 40% it had targeted. 

Its scale is still a fraction of the need, tens of billions lent against a financing gap measured in trillions. But its design choices are where the demonstration effect lies.

Two of those choices deserve attention.

Lending in the borrower's own currency, the rupee or the real, hit a record 45.9% of new approvals in 2025 and now approaches 30% of the portfolio. 

Adaptation has accounted for 44.5% of its committed climate finance, second only to the African Development Bank among multilateral lenders, according to the United Nations Conference on Trade and Development. 

Both matter for the same reason. Climate projects in the South too often fail on the hard-currency mismatch, where they borrow in dollars but earn rupees or reais and die on the exchange rate, and on a global system that has systematically short-changed the adaptation that vulnerable countries actually need. Under President Dilma Rousseff, the bank is attacking the single most common reason green infrastructure in the developing world never gets built.

Carbon markets and central banks: the unglamorous plumbing

The less glamorous work is where the declaration is most revealing. It welcomed a report on the role of central banks in optimizing sustainable and green finance, including adaptation and backed the implementation of a memorandum of understanding on a BRICS carbon markets partnership.

It also recognized forests and ecosystems as carbon sinks, supported the Tropical Forest Forever Facility launched at the Belem climate summit, and backed low-carbon aviation fuels under a new BRICS forum. 

Carbon markets and central banks sound like policy arcana, but they are the plumbing. 

A carbon market tells firms what their emissions cost; central banks determine whether green assets are liquid and bankable enough for institutions to hold. Together they turn a communiqué into a functioning market. The declaration also reaffirmed the Paris Agreement and the principle of common but differentiated responsibilities, anchoring the bloc's green-finance ambition within the multilateral system rather than against it.

China's domestic record as anchor

What gives the BRICS pitch its credibility is China, because Beijing is not asking the Global South to try something it has not already built at home. 

China's green-finance stock has passed 50 trillion yuan ($7.45 trillion), the largest of any economy, with green loans alone at 48.6 trillion yuan by the end of June and cumulative green-bond issuance above 5.6 trillion yuan. 

Its national carbon market, already the world's largest by emissions covered, has expanded beyond power generation to take in steel, cement and aluminum, lifting coverage to more than half of the country's emissions, with allowances trading near 100 yuan a tonne and cumulative turnover above 60 billion yuan. 

That is the template on offer: not a set of pledges but a working machine that prices emissions, channels capital toward low-carbon production, and turns climate diplomacy into balance-sheet reality. When China argues that a large developing economy can grow and decarbonize at once, it is pointing to machinery it has already built and run. That machinery is the model for the digital and manufacturing initiatives.

A principled 'no' to carbon border walls

The declaration opposed "unilateral, punitive, discriminatory and protectionist" measures, explicitly including carbon border adjustment mechanisms. 

The objection is not to carbon pricing, since BRICS is building carbon markets of its own, but to pricing imposed from outside, which treats a developing country's emissions as if they carried the same responsibility as a rich one's, and asks the Global South to pay for a transition it did not cause and can least afford. The alternative BRICS is assembling is cooperation rather than walls: a carbon-markets partnership, technology and capacity building, and local-currency finance that does not penalize countries for the currency they happen to use.

From pledges to plumbing

None of this is complete, and BRICS does not claim otherwise. 

A declaration is easier than a disbursement, the bank's lending is modest next to the sums required, and the bloc's members are honest that fossil fuels will keep playing a role in a just and orderly transition that respects national circumstances. 

But the direction is clear. A group of the world's largest developing economies is assembling the financial plumbing that turns climate promises into something priced, bankable and tradeable: a development bank, local-currency lending, carbon markets and central-bank coordination. 

It is the machinery the five initiatives will lean on, and it will carry these positions into the COP31 climate talks in Antalya this November. In green finance, that voice is beginning to speak in the only language capital understands.