State implements pilot emission trading scheme

PUNE: The state is implementing a pilot project of an 'Emission Trading Scheme' (ETS) as an alternative instrument of environment regulation. As part of the project, the Maharashtra Pollution Control Board (MPCB) has started mapping emissions of industrial units via online monitoring and will put a cap on emissions within a cluster, and on individual units.
"If the units exceed their cap, they will be forced to pay for the excess emissions. Units with excess emission can buy points from other units who have emitted less than the permissible limit. It is like the carbon credit mechanism used globally, and a self-regulation method for units to reduce emissions," environment secretary Valsa Nair Singh told TOI.
The ETS, also known as cap and trade, may work from both regulatory and economic perspective and cut down the overall cost of compliance, Nair Singh added.
She said that it would be an area-based environmental management approach having lower cost of compliance for achieving the health-based ambient air quality standards. Nair said a cap will be laid on the emissions made by a cluster and also on individual units operating within the cluster.
"Suppose unit A is allowed to emit pollutants up to 100 points, but is emitting 150 and the unit B is permitted up to 150 but is actually emitting only 100, then unit B can sell his points to unit A. For the next six months, we will be tracking the emissions of industries such as thermal plans, cement factories, etc which are responsible for ambient air pollution. Based on the six-month findings, we will determine the capping limit," Nair Singh said.
The pilot projects are being implemented in Maharashtra, Gujarat and Tamil Nadu, in association with a group of scientists from Massachusetts Institute of Technology, US.
The plan comes following a national consultation that was organised by the Ministry of Environment and Forests (MoEF) to discuss the 'market-friendly' emissions scheme for air pollutants, which the central government is working on introducing nationally.
According to the minutes of the national consultation, published by the MoEF on its website, this would be a first step in cluster level approach for developing green industrial estates.
"The market-based scheme is targeting local pollutants that have damaging health consequences. A pilot scheme is essential to address the practical concerns over monitoring, the permit allocation process, abatement costs and other matters. Running a two-year experiment will enable MoEF and the state pollution control boards to determine what role market based instruments will take in Indian environmental regulation in the future," the minutes said.
It also stated that the market-based scheme is innovative and India needs to make a start in this direction to ensure growth.
"We need to move to a way of regulating without regulators. Market-based schemes achieve this by providing firms with flexibility. We will spend the next two years in pilot for learning how this regulatory instrument could be used. Monitoring, determination of the cap and other issues are crucial to the success of the pilot scheme."