India Emissions Trading Scheme

Designing and evaluating a pilot emissions trading scheme to regulate industry emission of particulate matter in India
(with Michael Greenstone, Nick Ryan and Rohini Pande).

Environment and Pollution

Air pollution presents arguably the single most challenging environmental problem in India today. On the one hand, particulate air pollution levels in India are amongst the highest in the world and India has the highest rate of death from chronic respiratory diseases anywhere in the world. At the same time, environmental regulation in India is relatively inflexible and places high costs on industrial enterprise that are the engines of much needed economic growth. Thus the oft-cited tradeoff between environmental regulation and economic growth seems a false choice in the Indian context, since arguably neither of those objectives are achieved by current command and control regulation.

There is therefore an urgent need for regulatory innovation that might improve environmental outcomes, while at the same time reducing compliance costs for industry. This research project, in partnership with India's Ministry of Environment and Forests, the Central Pollution Control Board, and the state pollution control boards of Gujarat, Maharashtra and Tamil Nadu seeks to transform regulation of particulate matter from industrial sources in India. Two innovations are being designed, implemented and carefully evaluated through the use of randomized control trials.

First, the use of continuous emissions monitoring systems to provide real time and continuous monitoring of particulate emissions. Second, the introduction of a market based, cap and trade regime in particulate matter to replace existing command and control regulation. These two innovations represent the first such efforts anywhere in the developing world. This study will provide causal evidence of the impact of both continuous monitoring and emissions trading on regulatory costs, compliance levels, industry costs and environmental outcomes.

Project Status: Implementation Ongoing

Funding Sources: MoEF, CPCB, US-AID DIV, Shakti Foundation, IGC

[India Emissions Trading]

[Green Ratings]

[Fine Particulates and Mortality]

Presentations and Papers

SPECIFICATIONS AND GUIDELINES FOR CONTINUOUS EMISSIONS MONITORING SYSTEMS (CEMS) FOR PM MEASUREMENT WITH SPECIAL REFERENCE TO EMISSION TRADING PROGRAMS (CPCB/e-PUBLICATION/2013-14)

Presentation (IGC Growth Week, September 2013)