Open Markets – An Answer To Curb India’s Air Pollution Menace?


It is no secret that India is reeling under severe air pollution for the past few years. As per IQAir AirVisual and Greenpeace’s 2018 Report, 7 of the world’s 10 most polluted cities are in India!

In the recently conducted conference, titled ‘Sustainable Action Dialogue on Air Pollution’, organised by The Energy and Resources Institute (TERI), Dr. Arvind Kumar – the Founder of the Lung Care Foundation and Chairman of Centre for Chest Surgery at Sir Ganga Ram Hospital made a startling revelation that due to air pollution, cases of Lung Cancer have spiked in Delhi-NCR to such an extent that today 50% of his cancer patients are non-smokers! Worse, the lungs of almost all his patients are dotted with black spots that are usually found only in the cases of heavy smokers.

Apart from the grim health consequences, air pollution also poses serious threats to India’s economy. The impact is so severe that as per a 2016 World Bank study, India lost more than 8.5% of its GDP in 2013 due to the cost of increased welfare and lost labour productivity due to air pollution. At India’s current GDP size of $3 trillion, the loss equals to more than $250 billion!

While successive governments have been doing their bit to find feasible alternatives to curb air pollution, a notable pollution-control initiative that stands out is Gujarat State Government’s Emissions Permit Trading Scheme that was launched in August this year.

Widely hailed as the world’s first Emissions Permit Trading System (EPTS) for suspended particulate matter, the Gujarat Pollution Control Board (GPCB) has launched a ‘cap-and-trade’ scheme wherein a cap (upper limit) has been set for the total amount of emissions allowed for each industrial unit. Basis the allotted cap, GPCB issues ‘emission permits’ to each industrial unit. Developed on the ‘open market’ model, industrial units that restrict their emissions below their allotted cap can sell their remaining emission permits through GPCB’s EPTS e-market platform just like any other commodity.

Within a short span of two months since its launch, GPCB’s EPTS initiative has resulted in a 29% drop in the suspended particulate matter generated by Surat’s textile plants and is projected to increase their average profits by Rs. 8.6 lacs per annum.

While tactical measures like temporarily suspending construction work or an Odd-Even scheme may show momentary results, what India needs is more long-term strategic initiatives like Gujarat’s EPTS that offer people lucrative incentives to voluntarily curb air pollution.

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