The expanded BRICS grouping enters 2026 with impressive headline numbers. Its members account for around 45% of the world’s population, roughly 35% of global GDP, and—following the accession of Iran and the United Arab Emirates—close to 30% of global oil production. In a global environment increasingly shaped by power politics, these figures matter. They help explain why BRICS is frequently invoked as a potential counterweight in global governance, including in climate negotiations.
Yet the numbers alone fail to capture the full picture. China’s economy exceeds the combined economies of the other eight BRICS members. It accounts for nearly two-thirds of the bloc’s merchandise exports. It is building industrial capacity in solar, batteries, electric vehicles, and grid technologies at a pace that has turned clean energy manufacturing into geopolitical leverage. Chinese renewable exports increasingly function as instruments of influence, shaping supply chains, pricing, and technological standards.
Several other BRICS members remain structurally anchored in fossil fuel production. Their fiscal systems rely on sustained oil and gas revenues, and their national political coalitions are organised around protecting hydrocarbon rents. Iran and Russia exemplify this dependence, while Brazil and South Africa face more mixed and constraining dynamics. In different ways, these countries’ exposure to fossil fuel markets limits their ability to respond to climate-linked trade measures, regulatory shifts, or declining demand in major export markets.
This divide reflects infrastructure rather than ideology, and it shapes everything from BRICS members’ capacity to absorb economic shocks to their resilience in the face of carbon border adjustments and external economic pressure. Energy systems anchor political coalitions and determine which countries can pivot and which remain locked into established pathways as global conditions evolve.
The divergence between BRICS members is especially visible in the evolving financial architecture surrounding climate action. In 2024, Chinese development lending to Africa fell to just under US$2.1 billion, a sharp decline from its mid-2010s peak. This shift signals a reconfiguration of the climate finance landscape. Low interest government lending has increasingly given way to foreign direct investment, trade finance, domestic on-lending, and RMB-denominated instruments. This transition has material implications for energy transitions, with the shift not always benefitting finance recipients. Concessional lending from states provides receiving countries with more flexibility to finance their own energy infrastructure, such as grids, transmission upgrades, or renewable energy on terms aligned with their own development objectives. A move to more commercially structured investment results in returns being prioritised and strategic alignment with investor interests. For governments seeking to scale solar deployment or modernise electricity networks, this alters both the feasibility of this finance and their ability control its use.
India’s proposal to link the central bank digital currencies of BRICS members fits squarely within this context of financial control. The initiative intends to facilitate cross-border payments and reduce the reliance of BRICS members on the dollar, highlighting the importance of financial infrastructure for autonomy. Payment systems shape transaction costs, currency risk, and supply-chain resilience. As climate-related infrastructure grows increasingly dependent on complex international production networks, control over financial plumbing becomes a material determinant of which projects advance and under what conditions.
Together, these developments reveal the institutional environment within which BRICS’ climate positions are formed and constrained.
The limits of BRICS cohesion became especially visible in South African waters late last year. BRICS naval exercises off the coast sparked controversy over Iran’s participation. It demonstrated how alignment decisions carry uneven economic consequences for members with differing structural foundations. South Africa’s energy system remains overwhelmingly coal-based. Its manufacturing sector continues to centre on internal combustion technologies. Its trade exposure to US markets remains substantial.
The naval exercise was more about economic risk and South Africa’s capacity to absorb the economic consequences of perceived alignment with Iran, at a moment when its export competitiveness, investment flows, and fiscal space remain closely tied to Western markets. Brazil, by contrast, benefits from a largely renewable electricity mix and expanding green industrial capacity, providing greater flexibility to reorient partnerships. These infrastructural differences determine which BRICS members can push back against external pressures and which face sharper limits.
In formal climate diplomacy, BRICS statements emphasise equity, common but differentiated responsibilities, and the need for greater delivery on climate finance by developed countries. These positions resonate across the Global South, particularly given the persistent gap between commitments and implementation. Beyond this shared framing, however, the bloc struggles to be more specific on emissions trajectories, fossil-fuel phase-down timelines, or coordinated transition pathways.
South African President Cyril Ramaphosa described BRICS last year as “an equal partnership of countries with differing views but a shared vision for a better world.” That framing aligned more easily with a smaller grouping. Expansion has sharpened internal contradictions. The bloc now spans major fossil fuel exporters and renewable manufacturing hubs, countries with substantial policy space and those facing acute fiscal pressures, and economies experimenting with alternative settlement mechanisms alongside others deeply embedded in dollar-denominated trade.
BRICS retains the capacity to complicate Western-dominated climate governance. It challenges prevailing terms of global climate discourse and foregrounds inequities in existing arrangements. It creates space for developing countries to press for accountability on unmet finance commitments. Yet internal diversity and growing geopolitical entanglements constrain its capacity to translate critique into coordinated leadership.
Three dynamics will shape BRICS’ leadership in climate governance in the year ahead.
The first issue is whether India’s proposal on central bank digital currency interoperability moves beyond rhetoric toward workable systems with clear governance rules. Payment infrastructure often seems secondary until cross-border renewable supply chains or adaptation projects need to settle transactions outside dollar-based channels. In those moments, it becomes a binding constraint. Clean energy projects depend on money moving cheaply, quickly, and reliably across borders, yet current dollar-centred systems are slow, costly, and often difficult for firms in higher-risk or lower-income countries to access. This raises transaction costs, creates foreign-exchange risk, and can stall projects. An interoperable digital currency system could ease these frictions, reduce dependence on the dollar, and make renewable and adaptation projects easier to finance and deliver.
The second, is whether geopolitical tensions will continue to influence the risk environment for climate investment, particularly in countries whose energy systems remain tied to fossil-dependent trade. Where alignment with BRICS generates economic exposure that member states struggle to absorb, coordination risks drifting toward symbolism.
The third, is whether BRICS members’ energy investment patterns begin to converge more closely with their stated climate commitments. Renewable capacity and clean technology manufacturing continue to expand across parts of the bloc, even as oil and gas investments remain central to growth and revenue strategies. This duality reflects pragmatic transition management while signaling a limited appetite for collective climate leadership.
Climate outcomes increasingly hinge on the availability, cost, and structure of capital rather than on negotiated pledges alone. BRICS’ significance for climate governance in 2026 lies in its influence over the financial and institutional structures through which climate action is financed and implemented.
That influence carries weight. It differs, however, from leadership. As the bloc’s internal contradictions grow more visible, the gap between BRICS’ ambitions and its coordination capacity is likely to widen. Understanding this gap remains essential for assessing how global climate objectives will be pursued in an increasingly multipolar and contested international system. BRICS may shape the terms under which decarbonisation proceeds, determine who bears the costs, and influence whose interests prevail, even as its limits remain clear.
