NEW DELHI: With policymakers struggling to reduce air pollution in many cities, the Economic Survey, tabled in Parliament on Thursday, suggested adopting a market-based solution wondering whether an option of ‘Pollution Trading Scheme’ (cap-and-trade) can work as a tool to deal with the critical issue.
It referred to the success of the first-of -its-kind globally implemented particulate matter (PM) - a key air pollutant - emissions trading market in Surat, Gujarat where the scheme covered 317 industrial plants. It was launched in the city as a pilot in 2019.
Noting working of such a model widely in the US and the EU where the pollution markets (cap-and-trade) have been used for translating sound economic theory into effective environmental policy, the survey pitched for its adoption in developing countries, including India, where its progress has been limited.
The pollution trading market works on a model of capping total emissions and allowing companies to buy/sell emission permits under a system of limit on pollutants set by the government. The companies can sell their extra permits if they reduce emissions below their fixed limit. It’s a kind of mechanism to encourage them to opt for cleaner technology for reducing emission below the fixed cap.
Surat’s emissions trading scheme (ETS) was developed by the Gujarat Pollution Control Board (GPCB), in collaboration with the Energy Policy Institute at the University of Chicago. It led to mandatory installation of Continuous Emissions Monitoring Systems (CEMS), allowing real-time tracking of particulate matter emissions.
A study, published in The Quarterly Journal of Economics, showed that the plants participating in the Surat’s emissions market scheme reduced particulate emissions by 20-30% compared to plants regulated under the status quo regime.
Referring to the study, the survey said the findings brought out that the market functioned effectively, with active permit trading and near universal compliance.
It further said for a given level of emissions, the market reduced abatement costs by 11–14%. “This suggests that when supported by credible monitoring infrastructure, pollution markets can deliver significant emissions reductions at lower compliance costs even in lower-capacity settings,” said the survey.
Vishwa Mohan is Senior Editor at The Times of India. He writes on...
Read MoreVishwa Mohan is Senior Editor at The Times of India. He writes on environment, climate change, agriculture, water resources and clean energy, tracking policy issues and climate diplomacy. He has been covering Parliament since 2003 to see how politics shaped up domestic policy and India’s position at global platform. Before switching over to explore sustainable development issues, Vishwa had covered internal security and investigative agencies for more than a decade.
Read Less
Start a Conversation
Post comment