Large-scale study in India shows that a pollution market can reduce emissions

illuminem summarises for you the essential news of the day. Read the full piece on Yale News or enjoy below:

🗞️ Driving the news: A large-scale study by Yale economists Rohini Pande and Nicholas Ryan finds that India’s pilot cap-and-trade market for particulate matter in Surat reduced emissions by 20–30% and cut industry compliance costs by 11% compared to traditional regulation
• The program — the first of its kind targeting particulate pollution — operated effectively over 18 months, with participating factories meeting pollution limits 99% of the time

🔭 The context: Emissions trading schemes (ETS) have proven successful in reducing carbon and sulfur dioxide in countries such as the U.S., EU members, and China
• However, India’s experiment in Surat marks the first application of this approach to particulate matter — a leading cause of air pollution-related disease and premature death
• Traditional command-and-control policies in India have often failed due to weak enforcement and high compliance burdens

🌍 Why it matters for the planet: Particulate matter (PM2.5) is among the most harmful pollutants to human health, contributing to respiratory and cardiovascular diseases
• This study demonstrates that market-based mechanisms can deliver significant environmental and health benefits in developing countries, even with lower state capacity
• The scalability of this model holds global potential for more efficient pollution abatement strategies

⏭️ What's next: India is now expanding emissions trading across Gujarat and piloting new markets in cities like Ahmedabad
• The central government is also developing a national carbon market, with technical input from the research team
• Additional pilots targeting sulfur dioxide in Maharashtra suggest broader uptake of market-based instruments is underway
• Key policy decisions in the coming years could shape how low- and middle-income countries tackle air pollution at scale

💬 One quote: “Even in a setting with lower state capacity, a compliance market can work, and often will outperform the command-and-control approach.” – Rohini Pande, Yale University

📈 One stat: The benefits of the cap-and-trade market were found to exceed the costs by at least 25 times, according to a cost-benefit analysis that considered public health impacts and abatement expenses

See on illuminem's Data Hub™ the sustainability performance of Tata Steel and its peers ArcelorMittal, and China Steel Corporation

Click for more news covering the latest on carbon market and pollution