In a recent development, India has become the first country in the world to initiate an Emission-based Trading program. The pilot program will take place in Surat city of Gujarat, where approximately 350 factories mostly (Dye, Textile & Diamond processing) are considered. This is a one-of-its-kind program as it will be trading in particulate matter. There are various other successful cap and trade programs which has reduced the SO2 & NO2 like the one the United States of America for Acid Rain.


Under this program, the government will put a cap on the total amount of air pollutants matter that can be emitted over a period of time by all the plants together. Then, these permits, which allow a certain quantity of emissions, will be allotted to each plant. Further, these permits will be bought and sold on the National Commodity and Derivatives Exchange (NCDEX). The trading is assumed to tentatively start from 1st August 2019.

The way the plants will be allowed to exceed their individual pollution quota by paying a premium to their fellow industries who are more environment-friendly compared to them, together bringing the pollution level down.

The Gujarat government has worked in coordination with field experts Energy Policy Institute at the University of Chicago (EPIC), the Economic Growth Center at Yale University and others from The Abdul Latif Jameel Poverty Action Lab (J-PAL).

The current regulations are said to be not executed stringently, due to its complex implementation procedures. Currently, if the industries do not match the limits predefined by the pollution board, they have directly shut down their production, even if the penalty is small. This turns out to be very expensive for the industries to operate.

As interesting and promising the program seems, monitoring the particulate emissions will be a task since it is a majorly informal process currently in India. Also, what cap is decided by the government and what kind of trading process is put in line will also be engaging in the coming time.