Emissions Trading Scheme (ETS)

Emissions Trading Scheme (ETS) Latest News

The Surat Emissions Trading Scheme (ETS) is the world’s first market-based mechanism specifically designed to control particulate air pollution.

What is an Emissions Trading Scheme (ETS)?

• An Emissions Trading Scheme (ETS) is a regulatory tool that aims to reduce air pollution by introducing economic incentives.
  • Under ETS, a cap is imposed on the total permissible emissions.
  • Industries receive emission permits, which can be bought and sold, allowing companies to trade pollution rights.
  • This system is also referred to as "cap-and-trade".
  • Cleaner industries can sell their unused permits to polluting units, creating an economic incentive for pollution reduction.

Why is the Surat ETS Significant?

• The Surat Emissions Trading Scheme (ETS) launched in 2019, is the world’s first ETS focused on trading particulate pollution (not CO₂), and India’s first emissions market for any pollutant.
• It targeted 342 high-emitting industries, mainly in the textile sector, which used solid fuels like coal and lignite, and liquid fuels like diesel.
• The scheme was developed by the Gujarat Pollution Control Board (GPCB) in collaboration with J-PAL, EPIC, and Yale University.

Emissions Trading Scheme (ETS) FAQs

Q1. What is an Emissions Trading Scheme (ETS)?
Ans. An ETS is a market-based approach to control pollution by providing economic incentives to reduce emissions, commonly known as cap-and-trade systems.

Q2. How does an ETS work?
Ans. A government sets a cap on total emissions and issues permits, which industries can buy or sell based on their emission levels, promoting cost-effective reduction.

Q3. Which countries have implemented ETS successfully?
Ans. Notable examples include the European Union Emissions Trading System (EU ETS), South Korea, New Zealand, and some U.S. states like California.

Source: IE