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Gujarat is the most industrialized state in India and among its most heavily polluted. The Gujarat Pollution Control Board regulates more than 20,000 industrial plants using third-party audits; firms would choose and pay their auditors directly, and there was no mechanism to scrutinize the quality of auditors’ reports. As a result, auditors that reported the truth were unlikely to be hired, especially by highly polluting firms that did not wish to be noticed. Neither the Gujarat environmental regulators nor the auditors themselves thought the status quo system was producing accurate information about pollution. For the regulators, this meant they were unwilling to take action based on audit reports.
The Gujarat authorities partnered with EPIC researchers and collaborators to answer a simple question: Does adjusting incentives to break the conflict of interest lead to more truthful auditing, and thus, less pollution?
“Our partnership proves the success of innovative, evidence-based approaches to policymaking and is a model for how researchers and policymakers can make a big difference by working together.”
– Hardik Shaw, Member Secretary of the Gujarat Pollution Control Board
The EPIC team tested a series of reforms that gave auditors of polluting plants the incentives to tell the truth, including randomly assigning auditors to industrial plants and having their work double-checked for accuracy. The reforms led to more accurate reporting, and reduced pollution by 28 percent.
Through a strategic outreach campaign to spread the word about the success of the tested reforms, the team wrote a policy brief sent to targeted opinion leaders and influencers, penned an op-ed that appeared in the New York Times, and received coverage from national and international media such as the Wall Street Journal. In January 2015, the pilot reforms were officially adopted by the Gujarat government. Building off this early progress, the researchers are now working with Indian states to pilot a particulate matter emissions trading program, among other projects.