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A Review of Russia’s Climatic Initiatives in BRICS

By Ekaterina Bliznetskaya | Russia International Affairs Council | June 13, 2024

In April 2024, Russia announced its proposals for the BRICS Contact Group on Climate Change and Sustainable Development. The priorities for the year of Russia’s chairmanship included: issues of a just transition, adaptation to climate change, natural solutions, carbon markets and carbon pricing. Initiatives to share experience in the development of carbon markets and implementation of adaptation measures, as well as a proposal to foster scientific climate cooperation sparked considerable interest.

The discussion of climate agenda within BRICS already has a certain background. With its proposal, Russia took an important step towards institutionalizing the dialogue by establishing the Contact Group on Climate Change and Sustainable Development. In 2015, during the period preceding the adoption of the Paris Agreement, at the 7th BRICS summit in Ufa the countries emphasized in their final declaration their readiness to address climate change at both the global and national levels. Despite this declaration, the climate issue has long remained an element of dialogues and cooperation on sustainable development rather than a stand-alone item on the BRICS agenda. The climate issue came out of the “environmental” canopy after the BRICS High-Level Meeting on Climate Change, held remotely in the year of China’s presidency on May 13, 2022.

All of Russia’s initiatives refer to different areas of international climate cooperation – from a just transition, carbon markets and pricing to mitigation of climate change mainly by reducing greenhouse gas emissions. The interest in carbon markets can be explained by the willingness shared by the BRICS nations to ensure the inflow of foreign investment in renewable energy projects, energy efficiency, and energy infrastructure.

The same argument is generally applicable to climate change adaptation. It is known that international climate finance (from developed to developing countries) is accompanied by a serious imbalance towards the financing of greenhouse gas emission reduction projects, while adaptation measures attract much less financial resources. Even within the Green Climate Fund (GCF), overseen by the UNFCCC, there is a skew in the ratio of financial assistance channeled in favor of mitigation over adaptation. The benefits of reducing greenhouse gas emissions are global, as greenhouse gases are well mixed in the atmosphere, while the benefits of adaptation are largely local and depend entirely on a country’s ability to build a climate risk management system and integrate it with urban planning, emergency response and prevention policies, sectoral regulation.

For a long time, the motives for developing climate cooperation among the “old” BRICS members were driven by political rather than economic interests. Therefore, discussions and references to climate in the summary documents did not go further than that. The BRICS platform was not even used by countries to hold consultations during important processes under the UNFCCC, as is usually the case in the G20.

The events in Ukraine and the expansion of BRICS in membership are likely to change this situation. It is quite unlikely that all priorities will be worked out equally well with partners during Russia’s presidency, so it makes sense to analyze the documents to understand the existing groundwork in this area.

Adaptation to climate change

Climate change adaptation is a relatively new item on the BRICS climate agenda. The BRICS Economic Partnership Strategy 2025 mentioned that many nations were ready to raise climate change awareness risks and open a financial window for adaptation projects in the BRICS New Development Bank (NDB). Indeed, the NDB’s Overall Strategy 2022-2026 contains a target to use 40% of the financial resources raised for projects that address climate change and adaptation (without specifying the fund allocation ratio). The same document stated that the NDB “will, to the extent possible, consider disaster resilience in the preparation and implementation of its projects.” However, the NDB made this decision in line with the general policy of international development banks to strengthen their compliance with the Paris Agreement goals rather than with the BRICS strategies.

BRICS member states (except Iran), as parties to the Paris Agreement, are obliged to provide information on adaptation activities within nationally determined guidelines. In addition, as a result of the Conference of the Parties to the FCCC in 2010, a process was launched for developing countries to prepare and submit National Adaptation Plans (NAPs), which is now linked to Green Climate Fund grants and, as it was before, to UN development agencies and the World Bank providing support. Among the BRICS nations, it is Brazil, China, India, Russia and South Africa that report adaptation policies in their Nationally Determined Contributions (NDCs) to the Paris Agreement. Brazil, Ethiopia and South Africa are devising national plans to receive funds from international development agencies. Egypt, Iran, the UAE and Saudi Arabia have not yet formulated climate change adaptation policies. Thus, of all the BRICS+ nations that have an adaptation policy, only Russia and China do not link its implementation to the receipt of international aid.

Clearly, in the BRICS context, adaptation financing can only be disbursed on a South-to-South basis, i.e. voluntarily. Meanwhile, finance is an important—but not the only—component of adaptation cooperation. The availability of tools for integrated assessment of the climate change impact on the BRICS economies and, conversely, the climate policies and measures taken by countries that could be used for adaptation planning, are of paramount importance. Such tools are now actively developed by some of the BRICS nations, such as China or South Africa. Other members of BRICS, like India, are working with these countries to develop the said tools. Given that all BRICS states are highly exposed to both physical and transition risks, the contribution of risk assessment tools to adaptation planning cannot be overemphasized. In addition, businesses, municipalities (especially cities) and local communities may be interested in developing climate risk assessment tools that are tailored to the needs of different sectors based on their geographical location.

The 6th coordinated BRICS multilateral project competition within the BRICS Science and Technology Framework 2023 focused on climate change adaptation and mitigation, but among the research priorities there was none that would be directly linked to ensuring adaptation-related decision-making. This is surprising if one considers the current interest in climate risk management among BRICS central banks and financial institutions in general, which perceive climate change risks as a serious threat to their resilience and sustainability.

In the contact group discussions on adaptation in the year of Russia’s chairmanship, it is important to raise the issues of creating climate risk assessment tools accessible to a wide range of users and stimulating applied research on adaptation planning – for example, in cities. It will be equally important to link the results of projects and studies to NDB priorities and policies, to discussions within the interbank cooperation mechanism, and to support them with bilateral agreements on the development of monitoring and natural disaster risk mitigation systems.

A Just Energy Transition and BRICS Carbon Market Perspectives

Fully in line with the ideas of common but differentiated responsibilities actively supported by the new and old BRICS members and seeking to avoid climate measures imposing serious burdens on developing nations, Russia has proposed to discuss a just transition to a low-carbon economy. The very notion of a “just transition” has been extensively used by the European Union since its Green Deal was announced.

A just transition has a very broad meaning, but the main component is the need to mitigate the negative impact of an accelerated transition to a carbon-free economy on the poor, the fossil fuel labor market, and to “ensure that the substantial benefits of the transition to a green economy are widely shared.” But what is meant by a just transition in the framework of the association?

South Africa’s 2023 Chairmanship Program contained a paragraph on “developing partnerships for a just transition,” but this idea did not go any further in the final declaration of the summit. It was noted that the bloc’s member states:

– welcome increased cooperation and investment in supply chains for the energy transition and recognize the need to fully participate in the global clean energy value chain,

– recognize the role of fossil fuels in supporting energy security and energy transition and call for cooperation among BRICS nations on technology neutrality, as well as the adoption of common, efficient, clear, fair and transparent standards and rules for assessing emissions, developing compatible taxonomies of sustainable projects, and carbon accounting.

Thus, “equity” is understood in the BRICS context as the problem of global inequality of benefits gained from the energy transition and the right of nations to determine their own means of achieving the goals set in the Paris Agreement, politically neutral standards and rules for reporting emissions and generating carbon units from climate projects, rather than supporting people and industries in decarbonization programs.

To succinctly describe the emerging consensus on a just transition within BRICS, a short formula would be enough: “more investment in energy”. It describes grid construction, production of renewable energy equipment, modernization of fossil fuel-fired power generation capacity, etc. It is still premature to say whether there’s been an unambiguous political choice of the BRICS member states in favor of green energy.

Currently, BRICS comprises countries with opposite strategic orientations in the field of energy. Importing countries such as China, India, South Africa, Ethiopia and Egypt are interested in reducing their dependence on foreign energy supplies, while Russia, Saudi Arabia and the UAE seek to jump on the last train of the fossil fuel era and establish channels of energy trade for decades to come.

The BRICS nations are now looking for additional sources of financing to address energy poverty and reduce their carbon footprints. Besides, representatives of commercial circles have recently proposed on various platforms of the association to discuss a voluntary carbon market, which could become a source of investment. The initiative can be launched through agreeing on a common methodology for climate projects, approaches to their implementation and verification of results (carbon units) with subsequent mutual recognition of standards for disclosure of information on greenhouse gas emissions.

Of all BRICS member states, only China has a national carbon market, and Russia has only recently created the requisite infrastructure. Therefore, the discussion of the carbon market should be preceded by an exchange of views on approaches to carbon pricing, the role of compensation mechanisms (climate offsets) in achieving each country’s national climate goals. After all, the proposed initiative should take into account the international voluntary market for carbon units that has already existed for many years, as well as the emerging market under Article 6.4 of the Paris Agreement. How should companies from BRICS nations be “locked in” on the association’s carbon market is another difficult question.

Finally, a key obstacle to the BRICS carbon market, including a common registry and methodology for climate projects, lies in the very nature of the climate goals that the countries set for themselves. At present, only Russia, Brazil, Iran and Ethiopia have set economy-wide targets for reducing greenhouse gas emissions.

This factor predetermines a significant difference in the supply and demand of carbon units, and most importantly – in their “cost”. Companies from countries that do not have quantitative commitments to reduce emissions will be in an obviously more favorable position, while there’s not much clarity on the motive for establishing an external pool of BRICS carbon units instead of stimulating the implementation of climate projects within jurisdictions. Given the existing commitments under the Paris Agreement, the BRICS carbon market is at risk of being left without buyers.

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The BRICS climate agenda cannot and should not be considered in isolation from the strategic guidelines of its members in terms of trade and investment, energy, and technology. It is not another “sphere” of interaction among the BRICS members, nor is it a continuation of the climate policy that the member states pursue by other means. The climate agenda of any intergovernmental association is a dense tangle of agreements and compromises reached in dialogues on trade and economic issues. The presiding country may propose a specific pool of topics for the climate track, but this is not what sets the dynamics of the relationship. The real driving force will be converging interests—not necessarily national interests, but sectoral and private interests, as well as available resources and opportunities, coupled with the political will to use and/or exchange them.

A serious limiting factor for the climate agenda in the BRICS context is the institutional “laxity” of the association. Since Russia took over BRICS chairmanship in 2024, more than 50 events of various levels have already been held on a wide range of issues, but there is no mechanism for aggregating the results of dialogues, tracking the implementation of agreements and no channel for “spillover” between different formats of meetings. There is no mechanism to account for the results of discussions within the thematic tracks in the final documents of BRICS summits. For example, it would be productive to discuss climate change adaptation issues around recommendations for the NDB, as the results of applied research could be linked to the work of the Interbank Cooperation Mechanism and other platforms with financial institutions participating.

Amid the serious pressure of anti-Russian sanctions on the global energy market and the accelerated transit of the EU and China to carbon-free energy, Russia is now considering the nations of BRICS as important partners in energy trade. There is already ample evidence of this dynamic. In recent years, Russia has significantly increased its natural gas supplies to China and coal supplies to India. Russia and India have started to cooperate in the nuclear industry. The volume of China’s energy trade transactions with BRICS has been growing in 2024, although it accounts for less than 15% of the country’s total trade.

In the meantime, individual BRICS members are actively developing mutual trade in renewable energy technologies, and companies within BRICS, especially Chinese, are expanding access to critical raw materials (lithium, bauxite, cobalt, etc.) needed for the energy transition. Nevertheless, it remains far from clear how the expansion of BRICS might affect green energy technology markets. Meanwhile, this is precisely one of the key issues on the BRICS climate agenda.

Specific initiatives are to be preceded by dialogue on approaches to the relevant policies in both climate change adaptation and a just transition to a low-carbon economy. Even a cursory analysis of the current situation shows that these approaches are still too diverse. At the same time, the experience of the pandemic, EU and U.S. sanctions policies have shown how quickly and easily global supply chains, whereon the developing economies of BRICS heavily depend, can be disrupted. Thus, the threat of de-globalization emerges as the main driver for the rapprochement of countries. Yet, common interests of the BRICS nations can be short-term or long-term. BRICS climate agenda could be essential for building longer-term common interests. To do so, it must be consistent with national goals for low-emission sustainable development, the basis for which has to be established now.

Ekaterina Bliznetskaya is a lecturer at Moscow State Institute of International Relations under the MFA of Russia, Environment and Natural Research Studies.

July 5, 2024 Posted by aletho | Economics, Malthusian Ideology, Phony Scarcity | BRICS | Leave a comment