By Bhasker Tripathi
NEW DELHI, May 7 (Thomson Reuters Foundation) – Using a carbon market-like tool to control air pollution can help developing countries such as India where the standard approach of limiting the emissions with policy making is falling short, a new study has found.
Air pollution is one of the most pressing health issues in India, where the country’s 1.4 billion people breathe air exceeding the World Health Organization’s guidelines for particulate matter (PM).
Those are particles finer than human hair that can cause severe health issues such as respiratory infections and lung cancer.
This pollution costs the average Indian resident 3.5 years of life expectancy.
Industry is one of the major sources of air pollution in the country, and policymakers have struggled to deal with it by taking the standard approach of creating and enforcing laws around emission limits.
In fact, national PM 2.5 — particulate matter 30 times finer than human hair — concentrations in India increased by 11.6% over the last two decades.
To find an alternative, economists from the University of Chicago and Yale University in the United States and the University of Warwick in England collaborated with the Gujarat Pollution Control Board in West India to pilot a one-of-its-kind emission trading scheme (ETS) to control air pollution.
The pilot has run since 2019, and results published in the May issue of The Quarterly Journal of Economics show that the ETS reduced emissions by 20% to 30% in coal-burning plants that participated with nearly 100% legal compliance compared with those using a standard policy approach.
The ETS pilot delivered “a rare win-win-win” by reducing pollution, decreasing abatement costs and raising government’s success at enforcing the air pollution control law, said Michael Greenstone, Milton Friedman Distinguished Service Professor in Economics at the University of Chicago, one of the architects of the pilot.
“And it did all this in a setting where there was great scepticism that pollution markets could work,” he said.