New Delhi: Surat in Gujarat has become the first city in the world to start implementing an Emissions Trading Scheme for controlling particulate matter pollution in a move that can cut pollution levels by as much as 29 per cent.

The pilot scheme is being implemented by the Gujarat Pollution Control Board in coordination with researchers from the University of Chicago, Yale University and The Abdul Latif Jameel Poverty Action Lab (J-PAL).

“The Gujarat Pollution Control Board’s ETS is projected to both foster economic growth by reducing industries compliance costs and improve people health by reducing particulate air pollution. It is bringing Indian environmental policy to the global frontier,” says Michael Greenstone, Director of the Energy Policy Institute at the University of Chicago.

Greenstone and his co-authors find that the programme can reduce particulate pollution by 29 percent by setting a cap on the amount of pollution plants can emit equivalent to the amount they would have emitted if they had complied with current regulations, and allots permits to plants. Plants that emit less pollution can sell their extra permits to plants that find it too costly to comply.

This “cap-and-trade” system delivers plants greater flexibility and will cost them 36 per cent less than installing pollution abatement equipment. Because a large majority of permits are given to industries for free at the start of the market, plants able to sell permits actually make money from the programme.

Overall, the analysis finds that the vast majority of industries will see their profits increase by greater than Rs 5.5 lakh per annum with the average increase in profits being Rs 8.6 lakhs per year.

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Areas of Focus: Air Pollution
Air Pollution
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