What the BRICS carbon market partnership needs
BRICS can turn fragmented carbon markets into a coordinated trading framework
The BRICS Carbon Markets Partnership, announced during the 18th BRICS Summit in New Delhi on September 12, is set to focus on capacity-building and experience-sharing among its members. The agreement, confirmed in the New Delhi Declaration, does not include a trading framework, targets, or timeline. While the Rio summit acknowledged the memorandum in 2025, New Delhi has reiterated it, with India currently presiding over the BRICS group.
Eight BRICS members operate voluntary carbon markets, with Brazil, China, India, and Indonesia hosting over a third of the worldwide carbon credit projects. Compliance systems are progressing, with China's emissions trading system (ETS) now covering steel, cement, and aluminium sectors, India's Carbon Credit Trading Scheme (CCTS) notifying emission-intensity targets for 490 entities across nine sectors, and Brazil establishing a cap-and-trade system under its 2024 Law.
However, a significant challenge lies in the lack of linkage between these individual markets. The New Delhi Declaration acknowledges the need for a common rulebook to operationalize the partnership, emphasizing that a common trading platform is less crucial than a unified set of rules.
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