India, and many other developing nations, take solace in the U-shaped environmental Kuznets curve: a belief in this inverse theoretical relationship between income and environmental quality results in inadequate efforts by these states to tackle pollution and environmental degradation. There is an urgent need for policies which can protect societies and people from the adverse effects of climate change.

In this edition of I4I Conversations, Anant Sudarshan and Michael Greenstone discuss their work as environmental economists, and the many ways in which they have been able to use research to help guide policy. This includes their work on emissions trading in Surat, the cap-and-trade market in Gujarat, and clean cookstoves in Orissa. In that context, they list some of the difficulties with environmental regulation, such as the reluctance to install emissions monitors and falsification of the readings. They also delve into the trade-off between finding energy sources that are inexpensive and environmentally friendly – for instance, biomass, although a renewable energy source, is responsible for a large share of air pollution.