Surat Emission Trading Scheme (ETS): A Market-Based Solution to Air Pollution

1. A recent study reveals that the Surat Emission Trading Scheme has successfully reduced particulate pollution by 20–30%.
2. It also led to a significant reduction in compliance costs for industries, making it both environmentally and economically effective.

What is Surat ETS?

1. Launched in 2019 in Surat, Gujarat, it is the world’s first emission trading market specifically for particulate matter (PM).
2. The scheme is a pioneering initiative aimed at using market-based mechanisms to reduce industrial air pollution.
3. Its primary goal is to curb emissions by promoting cost-effective pollution control strategies.

How Does Surat ETS Work? (Cap-and-Trade Model)

1. The system follows the cap-and-trade principle, where a total emissions limit is set across all participating industries.
2. Each industrial unit receives a fixed pollution permit defining how much it can emit.
3. Industries that emit less than their cap can sell their unused permits to those that exceed their limit.
4. This promotes efficient allocation of emission allowances, incentivizing pollution control without compromising productivity.
5. Similar models have been successfully implemented for greenhouse gases in Europe and carbon emissions in China.

Trading Mechanism and Platform

1. Permit trading takes place on a digital exchange platform managed by NeML (NCDEX e-Markets Ltd.).
2. This transparent and regulated platform ensures real-time trading, verification, and compliance tracking.
3. It allows industries to optimize their pollution control strategies based on economic incentives.

 

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