ADVERTISEMENTs
India’s first pollution market successfully reduced emissions: Study
The pilot program, launched in collaboration with the state government of Gujarat, was implemented in Surat, a city with over 15 million residents.
-
Malvika Choudhary - Tue, 15, Apr 2025
- 12:46 EDT
- 105
Pollution in India / egc.yale.edu
A first-of-its-kind cap-and-trade market for particulate matter in India has significantly reduced industrial emissions while lowering compliance costs for factories, a new study found.
The study, led by Rohini Pande and Nicholas Ryan of Yale University in collaboration with researchers from the University of Chicago and the University of Warwick, evaluated a market-based emissions trading scheme launched in Surat, Gujarat.
Also Read: Researcher develops low-cost method to capture CO2
The pilot program, launched in collaboration with the state government of Gujarat, marked the world’s first emissions trading system for particulate matter—one of the most dangerous forms of air pollution, known to cause severe respiratory and cardiovascular illnesses.
Over a period of 18 months, 317 coal-burning industrial plants were required to install pollution monitors. Half of these plants participated in the cap-and-trade market, where emissions permits were traded to ensure total emissions stayed below a predetermined cap.
The study found that plants participating in the market reduced particulate emissions by 20 to 30 percent compared to those regulated under traditional methods. Additionally, the cost of compliance for participating plants was, on average, 11 percent lower.
“The exciting part of the emissions trading scheme that we did for particulate matter, aside from reducing emissions, is that it provides a proof of concept,” said Pande, who serves as the Henry J. Heinz II professor of economics at Yale and director of the university’s Economic Growth Center.
“Even in a setting with lower state capacity, a compliance market can work, and often will outperform the command-and-control approach,” she added.
Nicholas Ryan, associate professor of economics at Yale and co-author of the study, noted that the research builds on a long-standing partnership with the Gujarat Pollution Control Board.
“We have worked with [the board] for over a decade on testing policy interventions, such as altering the incentives of third-party pollution monitoring and sharing emissions information with the public,” Ryan said.
The economists conducted a cost-benefit analysis that estimated the benefits of the cap-and-trade market exceeded its costs by at least 25 times—attributed to both the relatively low cost of pollution abatement and the high health costs associated with air pollution.
Following the pilot's success, the Gujarat government expanded the program to additional plants and launched a second particulate matter market in Ahmedabad, the state’s largest city. The researchers are also advising the Maharashtra state government on developing a market for sulfur dioxide emissions and are working with India’s central government on forming a national carbon market.
“Our study showed that it does not need to cost a lot to reduce emissions,” said Greenstone. “India has the potential to be a model for low- and middle-income countries.”
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT
E Paper
ADVERTISEMENT
.jpg)
Video
.JPG)
.jpeg)
.JPG)
.JPG){kind=spacer}
Comments
Start the conversation
Become a member of New India Abroad to start commenting.
Sign Up Now
Already have an account? Login