Learnings from emissions trade in India

  • Blog Post Date 20 September, 2022
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Anant Sudarshan

Energy Policy Institute at Chicago


India, and many other developing nations, take solace in the U-shaped environmental Kuznets curve: a belief in this inverse theoretical relationship between income and environmental quality results in inadequate efforts by these states to tackle pollution and environmental degradation. There is an urgent need for policies which can protect societies and people from the adverse effects of climate change. 

In this edition of I4I Conversations, Anant Sudarshan and Michael Greenstone discuss their work as environmental economists, and the many ways in which they have been able to use research to help guide policy. This includes their work on emissions trading in Surat, the cap-and-trade market in Gujarat, and clean cookstoves in Orissa. In that context, they list some of the difficulties with environmental regulation, such as the reluctance to install emissions monitors and falsification of the readings. They also delve into the trade-off between finding energy sources that are inexpensive and environmentally friendly – for instance, biomass, although a renewable energy source, is responsible for a large share of air pollution. 

They touch upon India’s ranking on the recent Yale Environmental Performance Index and go on to emphasise the role of state capacity in ensuring low pollution levels – specifically, the importance of clearly defining and implementing government intervention. They conclude with the political economy and geopolitical challenges of adapting to climate change – including barriers to migration – and the need for countries to collaborate in order to deal with climate change.

This is the twelfth edition of I4I Conversations.

Also available as a podcast.


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