The Gujarat Pollution Control Board (GPCB) in collaboration with The Abdul Latif Jameel Poverty Action Lab (JPAL), the Energy Policy Institute at the University of Chicago (EPIC), launched the live trading for pilot Emissions Trading Scheme (ETS) for Particulate Matter at a workshop organized in Kevadia, Gujarat on the 11th September.

The ETS program for Particulate Matter in Gujarat is the first of its kind in the world.

The pre-launch event was held at the Kevadia colony in the presence of Dr. Rajiv Kumar Gupta IAS, Additional Chief Secretary of Forest and Environment, Government of Gujarat and the Chairman, Gujarat Pollution Control Board (GPCB) and Shri H. K Dharamdarshiji IA&AS, Principal Accountant General. Leading academicians and global experts, Professor Michael Greenstone, the Milton Friedman Distinguished Service Professor in Economics and Director of the Energy Policy Institute at University of Chicago (EPIC) and Dr. Anant Sudarshan, South Asia Director at EPIC were key speakers at the workshop that was attended by over 600 participants including, prominent industrialists and Industries Associations of Gujarat from Surat, Ankleshwar, Vapi, Vadodara, Amdavad etc.

The Emissions Trading Scheme was formally launched on 5th June, World Environment Day, by the Honorable Chief Minister of Gujarat Shri Vijay Rupani. Over the last three months, all the participant industries have carried out mock trading to understand the modalities of the scheme. This event marks the launch of live trading among the 170 industries from 16th September.

The Emissions Trading Scheme is an innovative instrument for pollution regulation that has the potential to transform the trade-off between environmental quality and growth, improving air quality through a mechanism that is transparent, predictable and with lower costs of compliance to industry. In addition, the use of continuous emissions monitoring systems (CEMS) can enable the use of better targeted regulatory restrictions and greatly improve the information and ability of regulators to monitor the industry.

“Under the visionary leadership of Honorable Prime Minister and the able guidance of Honorable Chief Minister, GPCB has been committed to effective and efficient pollution control, using data and technology to improve environmental regulation”, said Dr. Rajiv Kumar Gupta IAS, Chairman of the Gujarat Pollution Control Board (GPCB). “The ETS initiative will help us understand the potential that reduced emissions will have on compliance and regulatory costs.”

Lauding the efforts of the GPCB team, Prof. Michael Greenstone, who is one of the principal investigators in the project said, “The goal of this market is to show that emission targets can be used to reduce compliance costs, increase industry profits and achieve environmental standards.”

Under the ETS, the overall amount of pollution allowed from regulated industries is capped. Plants can decide for themselves how to allocate the total permissible emissions among themselves by buying and selling ‘emission permits’. Plants for whom it is cheap to cut pollution have an incentive to make large reductions while selling permits to other factories for whom it might be very expensive to reduce emissions. This flexibility can dramatically reduce costs without affecting environmental goals.


**EPIC India’ advisory work and impact evaluation activities on this project have been funded by  MacArthur Foundation, United States Agency for International Development (USAID), International Initiative for Impact Evaluation, Central Pollution Control Board, Ministry of Environment, Forests and Climate Change and Shakti Sustainable Energy Foundation and we are grateful for their support.