How can South–South cooperation on carbon pricing help developing countries respond to unilateral measures such as the EU's CBAM?

The EU's Carbon Border Adjustment Mechanism (CBAM) charges importers for the carbon embedded in goods such as steel, aluminium, cement and fertilisers. BRICS leaders have rejected such measures as unilateral, punitive and discriminatory [1]. Protest alone will not change the EU's rules. Cooperation among developing countries on carbon pricing can make CBAM a reason to build their own systems and give them more bargaining power.

Why CBAM hurts the Global South

• Export competitiveness: carbon-intensive exports, such as Indian steel and aluminium, now face an extra charge at the EU border.
• Policy imposition: CBAM only deducts carbon prices actually paid at home. This pushes EU-style designs on economies at different stages of development.
• Fiscal drain: CBAM revenue goes to the EU budget instead of paying for the exporter's own just transition [1].

How South–South cooperation helps

• Home carbon price as a shield: a credible domestic price, such as India's Carbon Credit Trading Scheme (2023), lets exporters claim CBAM deductions and keeps the revenue at home.
• Common MRV rulebook: shared methods for monitoring, reporting and verification make Southern emissions data credible abroad. The World Bank–ICAP handbook advises aligning design rules before any linking [3].
• Collective platform: Rio (2025) noted the BRICS Carbon Markets Partnership MoU, and the New Delhi Declaration (2026) reaffirmed it. It supports capacity-building and a joint voice at the WTO and UNFCCC [1][2].
• Article 6.2 deals: country-to-country credit transfers under the Paris Agreement can bring clean-technology finance into the sectors CBAM hits.
• Southern priorities: the New Delhi Declaration's dialogue on aligning carbon markets with adaptation goals reflects Global South needs [2].

Limits to address

• The MoU is non-binding and sets no targets or timeline.
• Linking intensity-based systems (India, China) with absolute caps (Brazil) can weaken environmental integrity, so safeguards are needed [4].
• Soft domestic targets would make "Southern" credits less credible to buyers and to the EU.

South–South cooperation can turn CBAM from an outside imposition into a reason to build credible carbon pricing at home. India's BRICS presidency should agree common MRV standards first and link markets later. Matching ambition with integrity would back the principle of common but differentiated responsibilities and advance SDG 13 and SDG 17.