This report summarizes learnings from a pilot project to install Continuous Emissions Monitoring Systems (CEMS) for reporting industrial emissions in solid fuel burning factories in Surat, Gujarat. The pilot was implemented as a randomized control trial in a sample size of 373 plants. Continuous monitoring systems were gradually rolled out to all plants in phases, with assignment to a phase being conducted by lottery.

This allowed for a rigorous evaluation of impacts through a comparison of early phases (with CEMS) and later phases (without CEMS). During the intervention, data on particulate emissions was sent in real-time to the Gujarat Pollution Control Board (GPCB), the key implementing partner of the study. The motivation for installing CEMS was to help to reduce reliance on frequent manual monitoring, providing significant long-term cost and time savings, as well as increasing the reliability of readings. Because CEMS transform the visibility that regulators have into the pollution emitted by factories, CEMS may improve the ability to monitor firms, allowing regulatory standards to be better targeted and enforced. However, CEMS do impose small additional costs on industries and have been widely mandated by India’s Central Pollution Control Board.

As such, evaluating their effectiveness is of immediate policy relevance. In addition to any direct benefits, the installation and connection of CEMS is a necessary first step to introducing several forms of modern regulation, including market-based regimes. Regulations such as emissions trading schemes have the potential to allow the government to lower regional water and air pollution at a lower economic cost than under conventional command-and-control regimes.

The results observed at the end of the pilot evaluation period have been mixed, though largely positive. Regulator interactions with plants were found to increase, at least with regards to sending letters and warnings. Pollution over the course of the experiment dropped significantly across the sample but factories with CEMS did not emit less than their counterparts without these devices. One possible reason is that plants in later phases anticipated that their emissions would soon become visible and thus took early action. It is also possible that better data by itself does not suffice to reduce pollution. In fact, CEMS devices did enable new regulation: following the installation of monitoring technology, the Gujarat Pollution Control Board introduced India’s first pilot emissions trading scheme in Surat.

Read the report here