Towards an Emissions Trading Scheme for Air Pollutants in India
Author(s)Duflo, Esther; Greenstone, Michael; Pande, Rohini; Ryan, Nicholas
Emissions trading schemes have great potential to lower pollution while minimizing compliance costs for firms in many areas now subject to traditional command-and-control regulation. This paper connects experience with emissions trading, from programs like the U.S. Acid Rain program, to lessons for implementation of a Trading Pilot Scheme in India. This experience suggests that four areas are especially important for successful implementation of an emissions trading scheme: setting the cap, allocating permits, monitoring and compliance. The introduction of emissions trading would position India as a clear leader in environmental regulation amongst emerging economies.
MIT Center for Energy and Environmental Policy Research