Scaling Emissions Markets

Emissions markets are a popular environmental regulatory tool to address the pollution externality. Through our work in Gujarat, we demonstrated that such markets can work in the Indian context. In Surat, treated industries that traded permits reduced PM missions by 20-30% as compared to the control group that was not a part of the market (Greenstone et. al. 2025). Scaling this policy to states/clusters requires technical advisory to governments on feasibility assessment, market design and implementation monitoring. Our approach to scaling (joint initiative with EPIC India), has two fronts - a) New markets: feasibility assessment including advisory on the type of market based on the industrial landscape of the respective Indian states, followed by an implementation strategy, stakeholder mapping, programmatic monitoring and capacity building. We have commitments at varying levels of maturity from Maharashtra, Rajasthan and Tamil Nadu, in addition to interest in scoping more markets in Gujarat. b) Existing Markets: Programmatic monitoring of two live markets in Gujarat (Surat and Ahmedabad) - involves analysis of each compliance period including industrial trading behavior, adhoc regulatory decisions, deeply embedded field teams for understanding data quality anomalies as well as navigating the larger CEMS stakeholder ecosystem. The long-term functioning of any emissions markets is driven by such local factors, implying the importance of documenting such programmatic evidence which in turn feeds our capacity building strategy with specific examples in the Indian context.