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Climate change risk and financial stability in BRICS countries: The moderating role of climate finance

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  • Javed, Muhammad Hamza
  • Bhutta, Dr. Nousheen Tariq

Abstract

This research paper examines how climate change affects the financial stability in BRICS economies (Brazil, Russia, India, China, and South Africa) and specifically how climate finance moderate this effect. The reason is that the emerging economies are becoming more susceptible to climate-associated financial risks and there is a paucity of empirical data on how climate finance can be used to alleviate these risks in a single analytical framework. The study applies the Generalized Method of Moments (GMM) over the 2000–2023 period using a dynamic panel data model to deal with endogeneity and to include persistence of financial stability indicators. Financial stability is measured using Financial Development Index (FDI), Financial Vulnerability Index (FVI), Financial Soundness Index (FSI), and climate change is measured using CO2 emissions.

Suggested Citation

  • Javed, Muhammad Hamza & Bhutta, Dr. Nousheen Tariq, 2026. "Climate change risk and financial stability in BRICS countries: The moderating role of climate finance," The North American Journal of Economics and Finance, Elsevier, vol. 84(C).
    • Handle: RePEc:eee:ecofin:v:84:y:2026:i:c:s1062940826000586
    DOI: 10.1016/j.najef.2026.102636
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