The Punjab government has announced partnership with Abdul Latif Jameel Poverty Action Lab (J-PAL), South Asia, and Energy Policy Institute at the University of Chicago (EPIC), India, to launch the use of an emissions trading scheme to design and establish pollution markets in the state.

The collaboration was announced by the departments of industry and commerce and science, technology and environment on World Environment Day on Saturday.

Emissions trading scheme (ETS) is a market-based approach to controlling pollution by providing economic incentives for reducing the emissions of pollutants. A central authority allocates or sells a limited number of permits that allow a discharge of a specific quantity of a specific pollutant over a set time period.

Polluters are required to hold permits in amount equal to their emissions. Those who want to increase their emissions must buy permits from others willing to sell them.

According to a government press release, the partnership includes providing technical assistance and capacity building to public officials to effectively use data and research evidence from established and functioning emissions trading market at Surat.

First: Scheme for 200 dyeing units in Ludhiana

As a first step in the partnership, the state government and Punjab Pollution Control Board will launch an ETS to regulate emissions from 200 dyeing industries in Ludhiana besides reducing particulate and greenhouse gas emissions in the state.

“Pollution reductions can be delivered. The world’s first ETS for particulate pollution in Gujarat has already shown this. Punjab is now becoming the second Indian state to adopt this pioneering vision. For various other Indian cities battling polluted air and expensive regulations, ETS has the potential to improve air quality and health, reduce the regulatory burden on industries, and decrease government enforcement expenditures,” said Michael Greenstone, the director of EPIC and co-chair of energy, environment and climate change at J-PAL.

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