The Gujarat Pollution Control Board (GPCB) has kick-started an innovative, market-based trading system aimed at curbing air pollution levels in Surat, Gujarat. This pioneering scheme allows industries to buy and sell permits within a government-set emission limit, pioneering an emissions trading scheme (ETS). This landmark scheme sees the GPCB collaborating with research teams from the Energy Policy Institute at the University of Chicago (EPIC), the Economic Growth Center at Yale University, and the Abdul Latif Jameel Poverty Action Lab (J-PAL) among others. The world has witnessed successful implementation of similar cap and trade systems, notably for reducing sulphur dioxide (SO2) and nitrogen oxides (NOx) pollution levels in the United States. However, the Gujarati model is the first globally to take on particulate air pollution.
Understanding the Emission Cap and Trade System
Within this groundbreaking framework, the regulator initially lays down the total mass of pollution that all factories combined can release into the atmosphere over a stipulated period. This paves the way for the creation of pollution permits, each authorizing a certain amount of emissions, and their collective total equating to the predefined cap. Certain factors, which could be size or another set rule, determine how these permits are then allocated among factories.
Following this allocation, plants have the option to trade their permits with each other as commodities on the National Commodity and Derivatives Exchange Limited (NCDEX). Irrespective of the final segregation of permits, the total number does not fluctuate, thus ensuring the overall pollution levels correspond with the initially set cap.
A glance at Cap And Trade System Facts
| Fact | Description |
|---|---|
| Initiator | Gujarat Pollution Control Board (GPCB) |
| Location | Surat, Gujarat |
| Collaborators | Energy Policy Institute at the University of Chicago (EPIC), the Economic Growth Center at Yale University, Abdul Latif Jameel Poverty Action Lab (J-PAL) |
| Type of Pollution Tackled | Particulate Air Pollution |
| Trading Platform | National Commodity and Derivatives Exchange Limited (NCDEX) |
Significance and Impact of the Emission Cap and Trade System
This cutting-edge initiative by the GPCB is not just another stride towards achieving cleaner air in Surat, but also sets a global precedent for handling particulate air pollution. Through this mechanism of cap and trade, industries are incentivized to maintain their emissions below the prescribed limit. Moreover, the freedom to buy and sell permits instills competitiveness and promotes the adoption of cleaner technologies among industries. The total number of permits remains unchanged, hence regardless of the transactions, the overall pollution remains confined to the predefined cap.
