World’s First Particulate Emissions Market in Gujarat

World’s First Particulate Emissions Market in Gujarat

Why in the News ?

A recent study has shown that Gujarat’s Surat-based Emissions Trading Scheme (ETS) — the world’s first market for trading particulate emissions — has successfully reduced pollution by up to 30% and lowered industrial costs for pollution control since its 2019 launch.

World’s First Particulate Emissions Market in Gujarat

Surat-ETS: India’s First Implementation

  • Launched in 2019 for 342 highly polluting industries in Surat.
  • A collaborative effort by Gujarat Pollution Control Board (GPCB), J-PAL, EPIC, and Yale University.
  • Initial emission cap: 280 tonnes/month, later reduced to 270 tonnes/month.
  • Permits: 80% given free, 20% auctioned in open market.
  • Uniform-price auctions helped discover permit value (Rs 5–100 per kg).

Impact and Significance

  • Helped industries cut emissions by 30% compared to traditional standards.
  • Lowered pollution control costs while ensuring regulatory compliance.
  • Offers a flexible, efficient model for balancing environmental protection with industrial growth.
  • Proved the viability of market-based solutions in a developing country context.

What is Emissions Trading Scheme (ETS)?

●      ETS is a market-based regulatory tool to cut particulate and greenhouse gas emissions.

●      A cap is set on total emissions, and industries get permits to release limited emissions.

●      Industries can trade these permits — those emitting less can sell, those exceeding can buy.

●      Incentivizes cleaner technologies and ensures flexible, cost-effective compliance.

●      A floor and ceiling price is fixed to stabilize the market, with penalties for cap violations.