World’s first particulate matter trading scheme in Gujarat cut pollution by up to 30%, finds study led by ex-Obama advisor

The world’s first-ever market for trading in particulate matter emissions—launched in Gujarat’s Surat in 2019 through partnerships with the University of Chicago, Yale University, and the Abdul Latif Jameel Poverty Action Lab (J-PAL)—has reduced pollution by 20-30% among participating industries while lowering their compliance costs, according to a recent study published in The Quarterly Journal of Economics.

The Surat Emission Trading Scheme (ETS) seeks to curb air pollution by allowing plants to buy and sell permits for particulate matter emissions to stay within a fixed pollution limit. Each plant is given a limit on how much it can pollute. Those that stay within the limit can sell their unused permits to others that exceed theirs. This approach, known globally as a cap-and-trade system, has been used in Europe for greenhouse gases and in China for carbon emissions.