Context: A new study on the world’s first-ever market for trading particulate emissions, which are tiny particles that can impact human health, revealed that employing the market mechanism helped reduce pollution by 20-30 per cent in an industrial cluster in Surat.

Meaning of the context: Published in the Quarterly Journal of Economics, the study saw researchers compare the emissions performance of participating plants with those complying with the business-as-usual pollution standards. It covered 162 plants, predominantly in the textile sector.

Learning Zone:

• The Gujarat Particulate Matter (PM) Emission Trading Scheme (ETS), launched in Surat in 2019, is the world’s first market-based system for trading Particulate Matter (PM) emissions, aimed at reducing industrial air pollution.

Key Points on Gujarat PM ETS

• Initiated on June 5, 2019 (World Environment Day) by the Gujarat Pollution Control Board (GPCB) in Surat, a textile and industrial hub.
• World’s first ETS for PM emissions, unlike carbon or SO2 trading systems (e.g., EU ETS, Kyoto Protocol) and India’s first for any pollutant.
• Developed by: Gujarat Pollution Control Board (GPCB) in collaboration with the Energy Policy Institute at the University of Chicago (EPIC), Yale University, and Abdul Latif Jameel Poverty Action Lab (J-PAL).

Mechanism (Cap-and-Trade):

• Cap: Sets a total PM emission limit (initially 280 tonnes/month, reduced to 170 tonnes by 2022) for participating industries.
• Permits: 80% of permits allocated free based on emission sources (boilers, heaters); 20% auctioned at ?5-100/kg.
• Trading: Industries exceeding caps buy permits from those under limits via the National Commodities and Derivatives Exchange (NeML).
• Monitoring: Continuous Emission Monitoring Systems (CEMS) track real-time PM emissions, replacing manual inspections.

Source : Indian Express