Research to reduce particulate air pollution and test emissions markets
Air pollution is a risk factor for many of the leading causes of death worldwide, particularly in quickly industrializing countries like India. Policies that reduce air pollution can have significant benefits on health, productivity, and overall welfare – particularly for the poor – while potentially giving the global community a path to reduce carbon emissions and meet targets to slow climate change.
Using real-time, continuous monitoring of point-source emissions, we found factories that participated in a new emissions trading market in Gujarat, India, reduced pollution compared to those outside the system.
For more than a decade, a policy-research team has been making progress toward these goals. The collaboration includes researchers from Inclusion Economics at Yale University, the Energy Policy Institute at the University of Chicago (EPIC), the Abdul Latif Jameel Poverty Action Lab - South Asia (J-PAL SA), as well as environmental regulators from Gujarat, one of India’s most industrialized states. The team’s central objective is to test whether regulation innovations can curb pollution at low cost to both government and industry. First, the researchers experimented with altering the incentives faced by government employees responsible for auditing factories; then they developed, tested, and deployed new technology to directly measure factory emissions. Then, in 2019, with design and evaluation support from the research team, Gujarat’s government launched the world’s first emissions trading system (ETS) for particulate matter – the soot and other industrial emissions that pose major health risks in highly polluted developing economies.
By testing solutions at scale, the projects in this ongoing research program have shaped views on what is possible in environmental policy for low- and middle-income countries. The research on auditor incentives has helped improve the quality of Gujarat’s regulatory information, and preliminary findings showed reduced emissions from its factories. Moreover, the promising results from the Gujarat ETS led the state of Punjab to launch its own market in June 2021, and may be used by India’s Central Pollution Control Board to guide national environmental policy. The research has produced seven publications and working papers and dozens of articles in the media.