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The BRICS summit in New Delhi is over. The leaders have gone home, the declarations have been released and the familiar language of cooperation, development and a fairer global order has once again filled the diplomatic record. On climate change, however, the real work begins after the summit. The New Delhi Declaration has already provided India with a useful political opening. BRICS leaders have raised concerns about unilateral carbon border measures and supported greater cooperation on carbon markets. They have also backed the implementation of the BRICS Carbon Markets Partnership, including cooperation on capacity building, sharing experience and mobilising resources for climate action. That language matters, but declarations by themselves do not create markets, attract investment or give developing countries greater control over the economic consequences of climate policy. India now has an opportunity to take the next step and turn the political commitment made at the summit into something practical. The most promising place to begin is Article 6.2 of the Paris Agreement and the infrastructure required to make international carbon transactions credible, transparent and commercially useful.
The economics of climate change are changing quickly. For a long time, the central argument in international climate diplomacy was about responsibility. Developed countries had contributed more to historical emissions, developing countries needed room to grow and the world needed to find a way of reducing emissions without imposing an unfair burden on poorer economies. That argument remains important, but it is no longer the whole story. Carbon is increasingly becoming an economic variable that affects trade, investment, industrial competitiveness and access to markets. When a country puts a price on emissions, establishes standards for carbon intensive products or requires companies to disclose their emissions, carbon stops being merely an environmental statistic. It becomes part of the cost of doing business. This is why India’s response to what it sees as green protectionism cannot remain confined to objections against policies adopted elsewhere. India can continue to make the case against measures that it considers unfair, but it also needs to build the institutions that allow developing countries to operate effectively in a world where carbon has a financial value. Article 6.2 offers one route into that new economy.
The basic idea behind Article 6.2 is relatively simple even though the accounting rules are complex. Countries can cooperate to achieve their climate targets, including by transferring internationally recognised mitigation outcomes from one country to another. A country can therefore support an emissions reduction in another country and, subject to the rules, use the resulting mitigation outcome towards its own climate commitment. The critical issue is preventing the same reduction from being counted twice. If a reduction generated in India is transferred to another country, India cannot simply continue to count that same reduction towards its own target as if nothing had happened. This is where the seemingly dull business of carbon accounting becomes economically important. A credible system must be able to establish where a reduction came from, who owns it, whether it has been transferred and how it has been treated in national accounting. A carbon registry is therefore not just a database sitting somewhere inside a government department. It is the basic infrastructure that allows a carbon asset to be trusted by another country, an investor or a company. Whoever helps establish reliable standards for such infrastructure will have a voice in how the market itself develops.
India already has much of the institutional experience required for this task. The country has established the Indian Carbon Market and its Carbon Credit Trading Scheme, with a framework covering both compliance and offset mechanisms. The Bureau of Energy Efficiency has been given an important role in developing the market, while India has also been working on the institutional arrangements required for international cooperation under Article 6.2. The government has identified areas such as renewable energy with storage, green hydrogen, sustainable aviation fuel, green ammonia, energy efficiency and other technologies as potential areas for international cooperation. These are precisely the sectors where India will need large amounts of capital over the coming decades. The question, therefore, is not simply whether India can sell carbon credits. It is whether international carbon finance can be used intelligently to help finance parts of India’s transition without sacrificing mitigation outcomes that the country may need for its own climate commitments. That requires a much more strategic approach to carbon markets than simply maximising the volume of credits sold.
This is where BRICS can become useful. Instead of attempting to create a single common carbon market, which would immediately run into differences in national laws, accounting systems and climate policies, India could push for a permanent technical group focused on Article 6.2 and carbon market infrastructure. Its work would be practical rather than ceremonial. The group could develop common principles for registries, create templates for monitoring and reporting, discuss minimum standards for verification and accreditation, and explore ways of making national systems interoperable. A Brazilian project, an Indian industrial facility or a renewable energy project in another developing member country would still operate under its own national rules, but the information surrounding an international transaction could follow a common technical language. That would make it easier for countries to trust one another’s systems and for international investors to understand what they are buying. The advantage for India would be that it would not merely be responding to international carbon rules after they have been established elsewhere. It would have a place in the room where the technical architecture is being worked out.
The opportunity becomes even more significant when the wider Global South is considered. Many developing countries have considerable potential to reduce emissions but do not yet have the institutional capacity to participate in international carbon markets. A country may have good solar resources, large opportunities for energy efficiency, potential for methane reduction or sustainable land management, but that does not automatically produce a tradable mitigation outcome. Projects need reliable measurement, reporting and verification. Governments need registries. Companies need technical expertise. Financial institutions need confidence that the underlying asset is real. Smaller economies often lack the money and trained personnel to build all of this on their own. A BRICS technical platform could therefore provide more than a forum for exchanging views. It could become a capacity building network in which India and other larger economies help developing countries establish the systems required to participate in international climate finance. That would give the carbon markets partnership a concrete development function rather than leaving it as another piece of diplomatic language.
There is also a commercial opportunity for India that should not be overlooked. Carbon markets will generate demand for far more than carbon credits themselves. Companies will need carbon accounting services, verification, auditing, registry technology, emissions monitoring, legal advice and financial expertise. Banks will need systems for assessing projects and climate related risks. Exporters will need increasingly sophisticated information about the carbon content of their products. Governments will need digital infrastructure that can track transactions and prevent double counting. Indian technology companies, financial institutions, consulting firms, auditors and specialised climate businesses could provide many of these services. India has already demonstrated its ability to build large digital systems at scale. Applying that experience to carbon market infrastructure could become a new area of services exports, particularly if Indian systems are designed to be affordable and adaptable for other developing economies. In that sense, the carbon economy is not merely about selling tonnes of emissions reductions. It is also about selling the infrastructure, expertise and services that allow those tonnes to have economic value.
This could also change the way India approaches the debate over carbon border measures. The European Union’s Carbon Border Adjustment Mechanism has made carbon intensity increasingly relevant to international trade, while similar discussions are taking place in other markets. Developing countries have legitimate concerns that climate related trade measures could impose additional costs on their exporters, particularly where firms have fewer resources to measure and report emissions. BRICS has put those concerns on the political record. But there is a difference between objecting to the rules and building the capacity to operate under them. If Indian companies can demonstrate their emissions performance through credible systems, if their carbon reductions can be independently verified and if international transactions can be recorded through trusted registries, India will have a stronger economic position in negotiations over the future of green trade. Carbon market infrastructure cannot eliminate the disputes surrounding border measures, but it can give exporters, governments and investors better information with which to deal with them. The objective should therefore be to ensure that developing countries are not simply subjected to the carbon economy but have the institutional capacity to participate in it.
There is, however, a crucial reason for India not to treat carbon credits as easy foreign exchange. Every mitigation outcome has an opportunity cost. If India transfers a carbon reduction to another country, it may have to make a corresponding adjustment in its national accounting. That means the reduction may no longer be available for India to count towards its own climate commitment. A credit that looks commercially attractive today could therefore have a greater strategic value tomorrow. This is particularly important as climate targets become more demanding and as the demand for credible international mitigation outcomes develops. India needs a clear framework for deciding which emissions reductions can be transferred internationally and which should be retained for domestic climate purposes. The objective should not be to sell as many credits as possible. It should be to attract international capital into areas where that capital produces additional mitigation, technology and economic value. Projects in difficult sectors such as green hydrogen, industrial decarbonisation, clean fuels and energy storage may be more strategically important than simply exporting the cheapest reductions available.
The same principle should guide BRICS cooperation. A developing country should not be encouraged to sell its future climate options simply because an international buyer is willing to pay for them today. The purpose of a stronger carbon market system should be to improve the bargaining position of countries that generate mitigation outcomes. That requires transparency. Buyers need to know what they are purchasing, while sellers need to understand the value of the asset they are transferring. A BRICS framework could establish common disclosure practices around the origin of mitigation outcomes, the methods used to measure them, the verification process and their status in national accounting. Commercial confidentiality will always have a place in private transactions, but a basic level of transparency is essential if the market is to develop public trust. Without that trust, carbon credits risk becoming another financial product surrounded by complicated claims that ordinary investors, companies and communities cannot easily evaluate.
This is perhaps the most important lesson India can take from the summit. BRICS has often been described as a platform through which emerging economies can challenge the concentration of power in established international institutions. Carbon markets provide a practical test of that ambition. If developing countries believe that the rules governing the green economy are increasingly being written elsewhere, they need to develop their own technical capacity rather than relying only on political resistance. The countries that establish standards, build registries, certify projects and create trusted systems will influence how capital moves. That influence does not require one country to dominate the market. It requires countries to have enough institutional strength to negotiate from a position of knowledge.
India is particularly well placed to make that case because it sits at the intersection of several worlds. It is a major developing economy that still needs rapid growth, a significant source of future energy demand, a country building its own carbon market and a large provider of digital and professional services. It can therefore speak simultaneously to the concerns of developing countries and the requirements of international investors. A permanent BRICS technical group would allow India to bring these perspectives together. Its success should be measured not by the number of meetings held or communiques issued, but by whether countries are able to establish credible registries, develop compatible systems, prepare bankable projects and bring more climate finance into productive investment.
The real significance of the New Delhi summit may therefore emerge long after the diplomatic attention has moved elsewhere. The leaders have already given the BRICS Carbon Markets Partnership political backing. The next question is whether that backing can be converted into an institution that does useful work. India should push for a clear work programme, regular meetings of technical experts, participation from regulators and industry, and practical assistance for developing countries that want to enter international carbon markets. It should also encourage cooperation with existing international systems rather than building an isolated BRICS mechanism. The goal should be connectivity, credibility and scale.
Climate diplomacy is entering a more commercial phase. The argument is no longer only about who should reduce emissions and who should pay for it. It is increasingly about who measures carbon, who verifies it, who owns the resulting asset, who can trade it and who captures the economic value. Those questions will affect factories, exporters, banks, energy companies and governments across the developing world. India cannot control how every other country responds, but it can help ensure that the Global South has institutions capable of participating in the emerging carbon economy.
The BRICS summit has ended. The opportunity it created now needs to move from the conference room into the machinery of government and business. India should take the Carbon Markets Partnership seriously, give it a permanent technical backbone and make Article 6.2 a practical area of cooperation. The larger objective should be clear. Developing countries should not remain passive recipients of carbon rules created elsewhere. They should have the expertise and infrastructure to measure their own assets, negotiate their own transactions and decide which emissions reductions are valuable enough to retain.
The most important outcome of India’s BRICS presidency may ultimately have little to do with speeches. It could be the creation of a system that allows a farmer, factory, energy company or clean technology project in the Global South to turn a verified emissions reduction into finance without surrendering all of the value to someone else’s market. That would be a different kind of climate diplomacy. It would be less about protesting the rules of the new carbon economy and more about acquiring the capacity to help write them.
The summit is over.
Now India has to build the table.
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