BRICS and the Development of Financial Mechanisms Toward a Green Economy

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The global climate finance system is under significant strain, as current financial flows remain well below what is required to meet the targets of the Paris Agreement. Developing countries are encountering increasing barriers to accessing finance, particularly in terms of cost, speed, and volume—amid rising debt burdens, heightened economic volatility, and a decline in Official Development Assistance (ODA) from developed countries.

In this context, BRICS leadership offers a potential transformative alternative reducing dependence on finance and policy directions from Annex II countries and reshaping the global climate finance landscape through a solidarity-driven and coordinated agenda.

The BRICS group—comprising Brazil, Russia, India, China, and South Africa has actively engaged on the global stage, emphasizing the development of financial architecture that supports the transition to a green economy. A report released by UNCTAD in August 2025, titled “A BRICS Agenda for Enhancing Climate Finance”, presents a new agenda aimed at strengthening the capacity of developing countries to access finance in a fair, sustainable, and efficient manner. This reflects a shift from being aid recipients to policy-shapers in the international system.

The agenda is structured around five key pillars:

1. Scaling up climate finance through BRICS-led institutions
2. Enhancing South–South cooperation
3. Strengthening resilience to systemic shocks
4. Supporting the reform of international financial institutions
5. Transforming the role of finance from a regulatory tool to a development enabler

The report emphasizes the urgency of establishing new mechanisms and financial instruments tailored to the contexts of developing countries in order to meet decarbonization and climate adaptation goals.

In the ASEAN context, the BRICS approach offers a model for developing regional climate finance systems particularly through the role of regional development banks such as the Asian Development Bank (ADB), which manages the ASEAN Catalytic Green Finance Facility. This facility, administered by ADB, supports member countries in mitigating environmental risks. For Thailand, there is a need to establish a national green finance platform that links public policy, financial market mechanisms, and investor engagement.

Moreover, Thailand and ASEAN could draw lessons from BRICS initiatives in developing climate-related financial tools such as catastrophe bonds and regional reserve funds which could be adapted to the region’s increasing exposure to climate-related disasters. Central banks and finance ministries should be equipped to formulate flexible emergency policies that do not compromise long-term fiscal stability.

BRICS’ proposal to reform global economic governance also warrants support in international forums, including adjustments to voting rights in the IMF and Multilateral Development Banks (MDBs). BRICS aims to position the New Development Bank (NDB) as a “green bank” serving developing countries, to promote the development of credit rating systems that reflect their specific contexts, and to facilitate the use of local currencies in cross-border transactions. These measures could reduce exchange rate risk and enhance long-term financial stability.

The BRICS agenda goes beyond countering the inequities of the existing global financial system it is an effort to design a more resilient, sustainable, and equitable alternative. ASEAN and Thailand should seize this opportunity to elevate their roles in international platforms and adapt BRICS’ systemic approach to fit their domestic contexts—laying the groundwork for climate-resilient financial systems.

Author:
Ms. Namphueng Tassanaipitukkul
Senior Researcher
International Institute for Trade and Development (Public Organization)
www.itd.or.th
Publication: Bangkok BIZ Newspaper
Section: First Section/World Beat
Volume: 38 Issue: 12991
Date: Wednesday, Sep. 17, 2025
Page: 8 (left)
Column: “Asean Insight”