Climate
Are India’s FTAs Becoming Climate Policy by Default? The CBAM Challenge
The climate impact of FTAs is reshaping India’s trade strategy as EU carbon rules like CBAM alter market access and industrial competitiveness.
The climate impact of FTAs is becoming a defining issue for India’s trade negotiations, as carbon-linked rules like the EU’s CBAM increasingly shape market access and industrial competitiveness.
As India accelerates negotiations on free trade agreements (FTAs) with the European Union, United Kingdom, EFTA countries and the United States, a parallel transformation is unfolding — one where trade policy is increasingly shaped by climate-linked conditions.
A recent policy discussion summarised in India’s FTAs: Trade, Climate and Strategic Choices, organised by Climate Trends, argues that the EU’s Carbon Border Adjustment Mechanism (CBAM) represents not a marginal environmental tool, but a structural shift in global trade governance. The deeper question is whether India’s trade engagements are effectively becoming instruments of climate policy — and if so, under whose terms.
CBAM: From Environmental Tool to Structural Trade Instrument
Ajay Srivastava, Founder and CEO of GTRI, cautioned against viewing CBAM as a narrow carbon levy limited to a handful of sectors. While the current scope covers steel, aluminium, cement, fertilisers, hydrogen and electricity, the EU has stated its intention to expand the mechanism to all industrial products by 2033.
“What most people ignore about CBAM is that it will not only hurt six products,” Srivastava said. “After a few years when CBAM is in full form, then the normal CBAM liability on exports will range anywhere between 20% to 35%, and even 50% or more for products like aluminium.”
India’s average applied tariffs into the EU are currently around 3–3.5%. CBAM, by contrast, could impose carbon-linked charges many times higher. “Instead of 3% custom duties… exporters may pay 20%-40% under CBAM. And in return, all EU goods will be entering India at zero tariffs. Such a deal appears asymmetric,” he added.
From this perspective, CBAM is less a climate safeguard and more a structural replacement of tariffs with carbon-linked entry costs — one that sits outside the formal FTA framework while reshaping its economic value.
Climate Compliance as Market Entry Condition
The broader concern is cumulative compliance. CBAM does not operate in isolation. The EU Deforestation Regulation, supply-chain traceability rules, and ESG-linked disclosure expectations together create what analysts describe as an embedded climate cost for market access.
Colette van der Ven, Founder and Director of Tulip Consulting, noted that CBAM was a key sticking point in EU–India negotiations. “Even if the Indian government’s press statements suggest that there are provisions around MFN treatment, that may, in practice, not have very much value… giving country-specific flexibilities was already off the cards for the EU.”
In effect, climate-linked measures are emerging as non-negotiable features of trade architecture.
Divergent Impact: Large Firms vs MSMEs
The climate-trade shift is not uniform in its impact.
Large integrated producers such as Tata Steel and JSW, according to van der Ven, are relatively insulated. Many operate European subsidiaries, have internal monitoring, reporting and verification (MRV) systems, and possess capital for cleaner technologies. For them, CBAM is a manageable compliance cost.
However, the situation is starkly different for MSMEs.
Ajay Srivastava pointed to early evidence from CBAM’s reporting phase, which began in October 2023. “In FY25, our exports of steel and aluminium to the EU were down by 24%. Why? Because MSMEs could not supply data, and EU-based importers stopped placing orders from them. So, MSMEs will be the hardest hit. It will soon be a game only for large players.”
Van der Ven added that default carbon values under CBAM are punitive. “Even if you have relatively clean production, but you cannot measure it, you are still going to be getting a default value that is a lot higher than the actual carbon emissions… That means that your competitiveness level goes down.”
The key barrier is not necessarily emissions intensity, but data asymmetry and compliance infrastructure.
Trade Policy as Domestic Climate Policy
Suranjali Tandon, Associate Professor at NIPFP, framed the issue more fundamentally: “All matters of trade policy are also matters of domestic economic policy.”
She argued that Indian firms will require domestic carbon pricing, measurement systems, and industrial support mechanisms to respond effectively. “Indian companies need to have their own carbon pricing to be able to respond to such measures… The best thing that can be done is to have measurement systems in place while ensuring that there are domestic policies that support increasing production capacity.”
Without robust domestic support — incentives, certification regimes, transitional demand buffers — exporters may struggle to absorb external carbon costs.
Fragmented Global Carbon Regimes
A central tension lies in fragmentation. EU-bound exports account for roughly 20% of India’s trade. The remaining 80% flows to markets without CBAM-style requirements.
Srivastava highlighted the dilemma: Indian firms may need separate production processes for EU markets, raising costs across their operations. Producing “green” goods for a minority of export destinations could erode competitiveness elsewhere.
This fragmentation complicates investment decisions. Without globally harmonised carbon pricing, unilateral measures risk distorting trade patterns rather than aligning them.
Strategic Choices Ahead
The discussion suggests that FTAs are no longer purely about tariffs and quotas. They increasingly interact with carbon pricing systems, sustainability standards, and domestic regulatory reforms.
Recommendations emerging from the dialogue include:
>> Prioritising measurement and MRV infrastructure, especially for MSMEs
>> Designing selective emissions trading systems, beginning with large emitters
>> Aligning industrial, trade, and climate policies domestically
>> Viewing FTAs as platforms for cooperation, rather than solutions in themselves
Archana Chaudhary of Climate Trends summarised the broader shift: “Trade seems to be forcing domestic climate action and capital is being steered in that direction. These new trade deals and the carbon-linked rules are going to be shaping up India’s real economy.”
Climate Alignment or Competitiveness Risk?
The deeper climate perspective is complex. On one hand, CBAM aligns with long-term decarbonisation goals. On the other, its current design places disproportionate adjustment burdens on developing economies and smaller firms.
Van der Ven suggested that alignment exists beneath the friction. “Beyond the differences, there is alignment between the EU and India in wanting to decarbonize. We must think towards these win-win opportunities along the supply chain.”
The outcome, however, will depend less on individual FTAs and more on whether India can integrate trade, industrial, and climate strategies coherently at home.
As climate-linked trade measures proliferate, India’s FTAs may increasingly serve not just as economic agreements — but as de facto climate policy instruments reshaping the country’s industrial future.
Climate
Study Finds Warming Could Slightly Boost Atmosphere’s Methane-Cleaning Capacity
New research suggests climate warming may modestly enhance the atmosphere’s ability to break down methane, though competing chemical processes add uncertainty.
New research suggests climate warming may modestly enhance the atmosphere’s ability to break down methane, though competing chemical processes add uncertainty.
A new study by researchers at the Massachusetts Institute of Technology (MIT) finds that rising global temperatures could slightly increase the atmosphere’s ability to break down methane, one of the most potent greenhouse gases.
Methane is a major driver of global warming, second only to carbon dioxide. However, it does not persist as long in the atmosphere due to the presence of hydroxyl radicals—highly reactive molecules often described as the “atmosphere’s detergent” for their role in breaking down pollutants.
Balancing Effects of Water Vapour and Natural Emissions
The MIT team developed a new atmospheric model to understand how hydroxyl radical (OH) levels may respond to warming temperatures. Their findings reveal a complex balance of competing effects.
As global temperatures rise, atmospheric water vapour is expected to increase, boosting OH levels by about 9%. However, higher temperatures will also lead to increased emissions of natural gases from plants—known as biogenic volatile organic compounds—which can reduce OH levels by approximately 6%.
The net effect, according to the study, is a modest increase of around 3% in the atmosphere’s capacity to break down methane under a 2°C warming scenario.
Why Hydroxyl Radicals Matter
Hydroxyl radicals play a critical role in regulating atmospheric chemistry. They react with methane and other gases, breaking them down into less harmful compounds.
“About 90 percent of the methane that’s removed from the atmosphere is due to the reaction with OH,” said study author Qindan Zhu in a statement.
Beyond methane, OH also helps remove air pollutants and gases that affect public health, including ozone.
“There’s a whole range of environmental reasons why we want to understand what’s going on with this molecule,” said Arlene Fiore, a professor at MIT.
New Model Offers Deeper Insights
To conduct the study, researchers developed a model called “AquaChem,” which simulates atmospheric chemistry under different climate scenarios. The model builds on simplified “aquaplanet” systems, allowing scientists to isolate atmospheric processes without the complexity of land and ice interactions.
Using this model, the team compared current climate conditions with a scenario in which global temperatures rise by 2°C—widely considered a likely outcome without significant emissions reductions.
Uncertainty Around Natural Emissions
Despite the findings, researchers caution that there is still significant uncertainty—particularly regarding how plant emissions will respond to climate change.
Biogenic emissions, such as isoprene released by trees, appear to play a major role in influencing OH levels but remain difficult to predict accurately.
Future research will aim to refine these estimates and better understand how different climate scenarios could affect atmospheric chemistry.
Implications for Climate Projections
Even small changes in hydroxyl radical levels can have significant implications for how methane accumulates in the atmosphere.
“Understanding future trends of OH will allow us to determine future trends of methane,” Zhu said.
As methane continues to rise alongside carbon dioxide, insights into these chemical processes will be critical for improving climate models and informing mitigation strategies.
Climate
Climate change heat impact affected over 2.5 billion people
New analysis shows 2.5 billion people experienced climate-driven heat between Dec 2025 and Feb 2026.
Climate change heat impact: A new global analysis has found that climate change significantly influenced daily temperatures for billions of people worldwide between December 2025 and February 2026, underscoring the immediacy of the climate crisis
Climate change is no longer a distant abstraction—it is now embedded in the daily weather experienced by billions of people across the planet.
A new global analysis from Climate Central has found that between December 2025 and February 2026, more than one in six people worldwide lived through temperatures strongly influenced by climate change every single day.
The scale of exposure is striking. Over the three-month period, 2.5 billion people across 124 countries experienced at least 30 days of climate change-driven heat, pointing to a persistent and widespread shift in how global temperatures are being shaped.
Using the Climate Shift Index, a tool designed to measure the role of human-caused warming in daily temperatures, researchers were able to isolate the extent to which fossil fuel emissions are now influencing everyday weather patterns.
Climate change heat impact: Dangerous extremes
What emerges most starkly from the analysis is not just rising temperatures, but the growing prevalence of heat that directly threatens human health.
In 47 countries, every single day of what scientists classify as “risky heat” was attributable to climate change.
>> 47 countries experienced every single day of risky heat due to climate change
>> Nearly 225 million people faced 30 or more days of such heat
>> 81% of those affected were in Africa
For nearly 225 million people, this translated into a month or more of exposure to dangerous heat conditions—an overwhelming majority of them in Africa, where vulnerability to climate extremes remains high.
These findings suggest a shift from climate change as a contributing factor to climate change as a dominant driver of extreme heat events. In several regions, the report notes, warming did not merely intensify heatwaves—it fully accounted for the most dangerous days.
Dr. Kristina Dahl, Vice President for Science at Climate Central, framed the findings in unequivocal terms: “This analysis makes clear that climate change is not a future problem — it is a present-day driver of extreme heat around the world.”
She added: “Millions of people experienced a month or more of dangerous levels of heat that were made significantly more likely by climate change.”
Climate change heat impact: A world of cascading climate shocks
The same three-month period also revealed how rising temperatures are interacting with other climate systems, producing a cascade of extreme events across continents.
An unusually early heatwave in Australia—made five times more likely by climate change—persisted into the new year before giving way to intense rainfall and flooding. In Argentina, extreme heat strained infrastructure to the point of collapse, contributing to a power outage that left more than a million people without electricity.
Elsewhere, the combination of heat, low humidity and strong winds created conditions for destructive wildfires. In Patagonia, fires claimed lives and forced emergency responses, while similar patterns unfolded in parts of Africa, Australia and the United States.
Drought tightened its grip in parts of East Africa, with Kenya enduring its driest season in more than four decades, placing millions at risk of hunger. At the same time, other regions experienced the opposite extreme. Torrential rains and intensified storms killed more than 1,750 people across South and Southeast Asia, while floods displaced hundreds of thousands in North Africa.
Even cold extremes bore the imprint of a changing climate. Severe winter conditions across North America and parts of Europe caused dozens of deaths, widespread disruption and billions in economic losses, highlighting how warming can destabilise weather patterns in multiple directions.
Climate change heat impact reflects a deeper systemic shift
Taken together, the data points to a broader transformation. Climate change is no longer simply raising average temperatures—it is reshaping the entire spectrum of weather, from heatwaves and droughts to storms and snowfall.

The underlying driver remains consistent: the accumulation of heat-trapping emissions from coal, oil and gas.
As oceans warm and atmospheric systems shift, the result is a more volatile climate, where extremes are not isolated events but interconnected outcomes of the same underlying process.
Dr. Dahl underscored this interconnectedness: “Taken all together, these extremes are the latest signals of how fossil fuel emissions are disrupting livelihoods globally.”
A present reality, not a future projection
What makes the findings particularly significant is their immediacy. The analysis does not project future risks—it documents a present reality in which climate change is already shaping daily life for billions.
For policymakers, scientists and communities alike, the implication is clear: the climate crisis has moved beyond forecasts and into lived experience.
Climate
Weather, Not Just Emissions, Driving PM2.5 Pollution in Indian Cities: Study
A new Climate Trends report finds weather conditions can alter PM2.5 levels in Indian cities by up to 40%, calling for season-specific reforms in India’s National Clean Air Programme (NCAP).
A new analysis of India’s urban air quality has revealed that weather conditions can significantly influence pollution levels, sometimes masking the real health burden faced by residents. The report, released by Climate Trends, argues that India’s clean air policies must account for seasonal and meteorological factors to effectively tackle particulate pollution across major cities.
The study analysed Central Pollution Control Board (CPCB) monitoring data from 2024–2025 across six major cities — Delhi, Patna, Kolkata, Mumbai, Chennai, and Bengaluru — and found that meteorological conditions alone can shift pollution levels by up to 40 percent even without changes in emissions.
Researchers say the findings highlight a major gap in India’s National Clean Air Programme (NCAP) and recommend that the upcoming Phase-III reforms include season-specific targets, weather-adjusted evaluation metrics, and dynamic action plans triggered by atmospheric conditions.
Delhi’s extreme winter pollution
The report highlights Delhi as continuing to experience the most severe pollution crisis in the country. The capital recorded the highest annual average PM2.5 levels among the cities analysed and experienced prolonged periods of “Severe” and “Emergency” air quality days.
A particularly alarming finding is that Delhi recorded zero clean air days during winter, despite apparent annual improvements in pollution metrics.
According to the researchers, this discrepancy arises because annual averages can hide seasonal pollution spikes that occur during unfavourable weather conditions such as low wind speeds and high humidity.
“This study shows that a 20–30% reduction in annual PM2.5 does not translate into winter air-quality compliance in stagnation-prone cities like Delhi and Patna, where over 70% of days fall under low-wind, high-humidity meteorological regimes. NCAP Phase-III must therefore adopt season-specific targets, meteorology-triggered interventions, and airshed-level management frameworks to achieve meaningful public-health gains,” Aarti Khosla, Founder and Director of Climate Trends, said in a statement.
Weather plays a decisive role
The report emphasises that air pollution is not simply an “emissions-only” problem. Instead, it is strongly shaped by how emissions interact with atmospheric conditions.
Periods of atmospheric stagnation — characterised by low wind speeds and high humidity — prevent pollutants from dispersing, allowing them to accumulate near the ground and intensify exposure levels for urban populations.
Sagnik Dey, Head of the Centre for Atmospheric Sciences at IIT Delhi, explained the scientific basis for this pattern.
“The persistence of PM2.5 exceedances is strongly associated with sub-1 m/s wind regimes and elevated relative humidity across northern cities, where stagnation episodes sustain disproportionately high exposure levels. Ventilation efficiency emerges as the dominant determinant of inter-city variability. However, current NCAP evaluation frameworks primarily assess observed concentration changes without explicitly accounting for meteorological modulation, potentially leading to distorted interpretations of policy effectiveness. Integrating meteorological regime analytics is therefore essential to ensure a scientifically robust and equitable Phase-III evaluation.”
The study also estimates that simply shifting from stagnant atmospheric conditions to well-ventilated ones could reduce PM2.5 levels by 35–40 percent, demonstrating the powerful role of weather in shaping urban air quality.
Emerging patterns across Indian cities
Beyond Delhi, the report identifies several emerging trends across India’s major urban centres.
Southern cities such as Bengaluru and Chennai, historically considered less polluted, are beginning to show signs of winter-time air quality deterioration, signalling a new vulnerability. Meanwhile, Mumbai and Chennai recorded increases in annual pollution levels in 2025, suggesting that pollution challenges are expanding beyond seasonal spikes into year-round concerns.
Patna continues to face an intensifying crisis, emerging as the second-most polluted city after Delhi, driven in part by persistent atmospheric stagnation across the eastern Indo-Gangetic Plain.
In contrast, Bengaluru stands out for maintaining relatively stable and lower pollution levels, reflecting what researchers describe as “structural air-quality resilience.”
Kolkata’s complex pollution dynamics
Kolkata presents a unique case where meteorology interacts strongly with local pollution sources.
Dr. Abhinandan Ghosh of IISER Kolkata said meteorological conditions play a key role in winter pollution episodes in the city. “As a community of atmospheric scientists, we have long cautioned against a simplistic rat race to replicate Western PM₂.₅ benchmarks, for the Indian subcontinent is endowed with its own meteorological idiosyncrasies, complex topography, and friable alluvial soils that elevate baseline particulate concentrations. The report vindicates this standpoint: in Kolkata, it is not emissions alone but the capricious tyranny of winter boundary-layer dynamics – attenuated mixing heights and enfeebled dispersion – that engenders the most deleterious pollution episodes.”
Professor Abhijit Chatterjee of the Bose Institute pointed to biomass and waste burning as major contributors to winter pollution in the city.
“Amongst several sources, at the current scenario, biomass and waste burning are the major concern in Kolkata especially in winter. The high load of PM2.5 exceeding national standards in winter, primarily due to these two sources which accumulate near the surface because of low dispersion and ventilation coefficients.”
Need for season-specific policies
The study concludes that India’s clean air strategy must move beyond a uniform annual target system and instead adopt seasonally calibrated and meteorology-aware policies.
Experts argue that incorporating weather dynamics into pollution management would help policymakers better assess the effectiveness of interventions and design more realistic mitigation strategies.
Without such reforms, the report warns, improvements in annual averages may continue to mask severe seasonal pollution episodes that pose serious health risks to millions of urban residents.
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