Climate action in a fractured world: Trends for 2026

On January 13, US President Donald Trump slapped a 25% tariff on any country doing business with Iran. The news was received with consternation in Iran and beyond. Oil is Teheran’s biggest export — with China accounting for 80% of Iran’s petroleum exports. If the middle kingdom fell in line with Trump’s demands, such an embargo would choke Iran’s oil revenues and its capacity to pay for critical imports. If China didn’t fall in line, the delicate detente between the USA and China on trade might be toast.

Other countries exporting to Iran might need to disengage as well — with hard implications for both Iran and them. Iran imports critical commodities like rice and medicines. Some of its trading partners are delicately placed as well. Exports growth, for instance, is a key part of Sri Lanka’s efforts to ensure economic stability.

With any luck, none of these dire scenarios will materialise. “The US Supreme Court is expected to rule as early as this week on the legality of Trump’s use of the International Emergency Economic Powers Act (IEEPA) to levy tariffs,” wrote Bloomberg columnist Menaka Doshi. It is likely, she said, the court will disallow them.

For now, though, Trump’s threat is one more reminder that the world has changed. 
Earlier this month, as the US’ capture of Venezuelan president Nicolas Maduro showed, the world is also slipping back to a Cold War-like division of regions between today’s superpowers — USA, China and Russia. The rot, however, runs deeper. Across the world, as democracies decline, the world is also seeing more naked resource-grabs by the economic and political elite in country after country.

These processes are playing out at a time when ecosystems across our planet have slipped deeper into trouble. Carbon dioxide concentrations hit a record high in 2025. The planet neared the 1.5 Celsius warming threshold, causing extreme heatwaves, floods, droughts and wildlife globally. Biodiversity loss, of course, continued unabated.

Since 1997, when the Kyoto Protocol was signed, the world has been trying to arrest climate change. It was a hopeful time. The cold war had ended. Countries could imagine implementing joint responses to planetary crises.

Today, as the world fragments again, what lies in store for global biodiversity and the world’s fight against climate change? The answer to that question, as team CarbonCopy concluded, lies in how the tussle between six emergent processes — some good, some bad — plays out. 

Will superpowers succeed in dividing the world between themselves?

The first (new) variable in the global fight against climate change is the US’ newfound expansionism under Trump. In 2025, we saw signs of this in the critical minerals deal he forced upon Ukraine and his demands seeking Greenland. In 2026, these have been followed by the capture of (now former) Venezuelan President Nicolás Maduro and an announcement that Venezuela will supply 30 million-50 million barrels of oil to the USA each year.

Much of this calls colonialism and the cold war to mind. Back then, too, powerful nations had carved the world between them, using satellite countries for raw materials and/or using them as markets.

“(Trump’s) deploy­ment of US mil­it­ary might to seize Venezuelan oil smacks not so much of a lurch to the future as a return to a past,” the Financial Times noted. “For hun­dreds of years, the world was divided into spheres of influ­ence when com­pet­i­tion over resources — from spices to gold and from rub­ber to oil — led to the col­on­isa­tion of nations.” It is only in the post-war period that inter­na­tional law and global trade rules have held a tenu­ous sway. Now that order appears to be break­ing down and revert­ing to a former age.”

What will such a world look like? Going by Trump’s 2025 National Security Strategy, the USA will focus on western hemisphere dominance, tying access to cheap and abundant energy resources to US’ economic power, jobs and technological dominance. China’s decision last year to restrict rare earth exports is said to be one trigger for this switch. As for Venezuela, it had been moving closer to BRICS and experimenting with non-dollar oil trade.

There are other questions. Will China and Russia help the world isolate the USA, as economist Joseph Stiglitz suggested, or will they seek to capitalise on this moment and annex Ukraine and Taiwan respectively? Expansionism won’t stop there, naturally. And yet, as Trump’s critical minerals deal with Ukraine shows, there is no obvious way to delineate where one sphere of influence begins and another ends. Expect flashpoints here. And wars, as we know, are highly carbon-intensive.

That is just the start. During colonialism, colonies fought for independence. During the Cold War, freshly decolonised countries came together to form the Non-Aligned Movement. 

What will happen this time around? In this schemata, despite the presence of Russia and China, will BRICS, chaired by India this year, have some answers? Will it rethink its reliance on international law, multilateral institutions and diplomatic engagements to preserve strategic autonomy? Alternately, will BRICS nations work closer together — potentially opening the door to a bigger thaw in relations between India, China and Russia?

For now, countries will have to tread carefully. India should remain mindful of being drawn too closely into any binary system — especially one where the US and China emerge as the de facto superpowers and the rest are expected to fall in line, said retired Indian diplomat Manjeev Puri.

Can BRICS keep the climate change momentum going?

As the US embraces fossil fuels and expansionism, the world’s fight on climate change is getting marginalised. Pushed into this new world where they might need to defend Greenland from the USA, NATO and Europe are re-investing in weapons manufacturing. This military buildup, said Lowy Institute, is  “drawing on stretched public finances – suggesting a sharp retreat from the EU’s climate ambitions”.

As for the US, it has rejected climate change; scuppered the Inflation Reduction Act; pulled support away from ESG; quit the United Nations Framework Convention on Climate Change (UNFCCC), the Paris Accord and the Intergovernmental Panel on Climate Change (IPCC); and embraced fossil fuels — Trump wants them to power even data centres.

In effect, much of the developed world is decoupling from climate action. With that, as COP29 AND COP30 have shown, funds for adaptation and mitigation have been hard to raise. Spigots financing climate change activism are drying up as well. In the past year, major banks and asset managers have retreated from headline climate alliances, not by abandoning climate altogether, but by dropping the language while keeping selective investments alive. Donors are either giving up on climate change as a lost cause — or chasing better returns in energy and elsewhere. Within the Global South, climate activists and environmentalists continue to get persecuted. 

Against this backdrop, what will 2026 mean for the global fight against climate change?

One part of the answer again comes back to BRICS. It now houses more than 45% of the world’s population and nearly 30% of global GDP. As a platform for countries where climate change is already an emergency, can it use its collective muscle to keep developed countries active within the multilateral framework for fighting climate change? Or, as superpowers embrace expansionism, will smaller countries, too, invest in defence — leaving smaller allocations for decarbonisation, adaptation and mitigation?

The world is veering away from multilateral climate action to bilateral approaches. Are these a solution?

On January 1, 2026, the EU’s Carbon Border Adjustment Mechanism (CBAM) came into force. Slapping a levy on steel, etc, produced using fossil fuels, it seeks to protect green EU steelmakers from cheaper (more polluting) competition from other countries, while encouraging cleaner manufacturing beyond EU borders. As multilateral efforts falter, such bilateral measures have been hailed as a form of climate progress. Do they work?

Late last year, CarbonCopy had studied the ground-level effects of another ‘green’ trade barrier — Sustainable Palm Oil. Under the 2023 EU Deforestation Regulation (EUDR), anything not forest-friendly will lose access to the EU market. In addition, Oil Palm growers, too, have rolled out initiatives like Roundtable on Sustainable Palm Oil (RSPO); Malaysia Sustainable Palm Oil (MSPO) and Indonesia Sustainable Palm Oil (ISPO). Are these curbing deforestation?

The short answer to that question is ‘No’. A March 2025 study published in Nature found that sustainability pushes like RSPO have reduced efficiency at Malaysia's palm oil plantations. And so, the market for palm oil has split into two. “When a region — as opposed to all countries — adopts a green measure, what the world gets is a readjustment of trade,” we wrote. “Sustainable palm oil is moving to Europe. Palm oil from Papua New Guinea and elsewhere… is flowing to countries like China and India… For this reason, EUDR is more effective as a trade barrier than an anti-deforestation measure.”

Decarbonisation will continue. It will, however, make differential progress. The US and countries allied to it will lag behind China.

Even as these trends roil the world, renewable energy continues to get cheaper. In 2024, solar photovoltaics were 41% cheaper than their nearest fossil fuel alternative. At 53%, onshore wind projects were even cheaper. As energy storage projects — like BESS or Pumped Storage — added scale, old concerns about the unpredictability of renewable energy are easing as well.

In India, battery storage costs have fallen by almost 80% in the past two years — from ₹10.18 in 2022–23 to ₹2.1 per unit in December. Needless to say, this is a global trend. “The average pack price for stationary storage systems dropped to $70/kWh, 45% lower than in 2024,” reported Bloomberg. Customers are taking note. As old concerns like ‘range anxiety’ eased as well, EVs accounted for more than 20% of all cars sold in 2025.

In effect, the impetus for decarbonisation of energy systems is shifting from governments to markets. In 2025 decarbonisation progressed unevenly across the world. Riding on cheap panels from China, countries like Pakistan beefed up their RE infrastructure. On the other hand, as the Trump administration removed tax credits for green energy and pushed nuclear energy and fossil fuels, “the United States is forecast to add a lot less power from renewables in the coming years than analysts previously expected,” noted NPR.

The implications of US’ actions run deep. 

OPEC is in trouble 

In addition, (Organization of the Petroleum Exporting Countries) OPEC will slip into trouble. This is not about Venezuela. In the days after the US attack on Venezuela, it was speculated that oil prices will fall as Venezuelan supply enters the market. It has since been argued that Venezuela’s oil reserves are smaller than claimed and that, in addition, the country cannot boost production swiftly. It also emerged that Venezuela’s oil production is a fraction of global production. 

In December, for instance, OPEC pegged production in 2026 at 43 million bpd (barrels per day), saying this would closely match global demand. To put that number in perspective, Venezuela currently produces 1.1 million bpd and analysts see its production rising, at most, to 2 million barrels by 2030. To return to its glory days of 3 million bpd in the late 1990s, Venezuela will need to invest as much as $183 billion.

This is where complexity enters the picture. As the share of EVs rises, oil demand will fall. The International Energy Agency (IEA) has already said global oil demand will stand at 40 million bpd, not 43 million bpd. Oil prices should stay under pressure. 

As economic elite in each country entrench themselves further, political instability is rising

As country after country sees a rise in inequality, democratic decay and environmental carnage, both precarity and popular discontent have grown. In 2022, the Rajapaksas had to flee Sri Lanka. In 2024, Sheikh Hasina fled Bangladesh. In 2025, popular protests similarly felled the government in Nepal.

This trend is likely to continue in 2026, said economist Jayati Ghosh. “(One) thing I would add is likely greater political instability in a whole range of countries, led by frustrated and angry youth, and geopolitical ramifications of this, which will also affect climate policy.”

As economist Adam Tooze showed in his book ‘Crashed: How a Decade of Financial Crises Changed the World’, one reason for the global surge in right-wing parties was global precarity triggered by the US subprime crisis. In Europe too, popular disenchantment has seen the resurgence of far-right parties. Several of these oppose climate action.

This time around, one trigger for rising precarity – and ergo, unrest – worldover is Trump’s tariff war. How it plays out world over will need to be watched.

Endgame

2025 was not a good year for the Earth.

It had, among other egregious developments, Indonesia calling in the army to clear three million hectares of forests in Papua New Guinea. It was also the third-hottest year in recorded history — this despite the year seeing, as Bloomberg wrote, “a cooling phase in the equatorial Pacific Ocean, or La Nina, that suppresses global temperatures”.

In 2025, scientists reported that humanity has breached seven of the nine planetary boundaries — including climate change and ocean acidification — pushing the Earth’s life‑support systems into dangerous uncharted territory.

In effect, as scientists found, the pace of global warming is accelerating. So much so that the world might surpass the 1.5°C target as soon as 2029, 13 years sooner than projected by the Paris Agreement, and see a year above 2°C of warming by 2029. At that time, expect bigger storms, heatwaves and wild fires. On the brighter side, RE prices continue to fall — and the world continues to decarbonise. Now to see if the Global South can rise to the occasion.