There will be a twoyear pilot emission trading scheme, at an estimated cost of Rs 360 crore, which will cover 1,000 industries, near metro areas in Gujarat, Tamil Nadu and Maharashtra. Environment minister Jairam Ramesh said this initiative would "convince market wallahs" that the Environment Ministry is not anti-market or anti-industry . "We are interested in the growth of industry, but this has to happen in an environment friendly manner," Ramesh said. Given that a market-based system will reduce the costs compliance , it will be easier in the longrun to introduce new regulations that increases environmental quality. It will, therefore, pave the way for "stricter and more robust" environmental regulations without constraining industrial growth. "So, we had to find a way of regulating without regulators. I look upon today's initiative as a first step that India is taking to enforce environmental regulations in a marketfriendly manner."
The emission trading system puts a price for emissions, making it costly to pollute, therefore incentivising polluters to reduce emissions. This marks a shift from the command control system , where state pollution control boards determined the emission levels of individual units. In the market-based system, where a price is set on emissions, the regulator or state pollution control board sets an overall limit for emissions of different pollutants and industrial units selfregulate to ensure that these limits are not breached. Broadly, the state pollution control board will set a limit on the amount of categories of air pollutants that can be emitted on the basis of its desired concentration in the atmosphere. The state regulator then allocates through permits "acceptable" level of emissions to industrial units. The industrial units can trade this right to emit, so units which exceed the set level will have to buy permits from those who manage to restrain emissions to below the cap. Read the full report here.
Source: ET Bureau, Economic Times, New Delhi.
