The western state of Gujarat has launched the world’s first trading programme for particulate air pollution. The pilot, launched on World Environment Day in June this year, replicates a market-based system. The government sets a cap on emissions and allows industries to buy and sell permits in order to stay below the cap. This is similar to a system that successfully reduced acid rain in the United States in the 1990s.

The pilot programme was put in place in the city of Surat, a densely populated industrial belt where textile and dye mills contribute to air pollution. As the first market-based approach to regulating pollution emissions in India, it is expected to reduce air pollution at a low cost to both the government and the industry, as well as pave way for replicating similar trading schemes to reduce all kinds of unwanted emissions.