Our collaboration with the Gujarat Pollution Control Board (GPCB) has its roots in a large-scale experiment conducted with research partners from J-PAL, Yale, and the University of Chicago and published in 2013. The intervention severed the ties between environmental auditors and the firms they monitored, and showed that this not only led to more truthful reports by the auditors, but reduced emissions by the factories. The GPCB incorporated several components of the scheme into their practice and invited us to train regulators in data analysis and the use of data. 

Since then, we along with J-PAL researchers have worked closely with the GPCB developing and testing a device installed directly in factory stacks at 135 sites that allows emissions readings from Continuous Emissions Monitoring Systems (CEMS) to be fed directly to regulators in real time via a digital interface. The project not only promises to deliver a leap in the quality of information that regulators can access, it is being watched closely by India’s Central Pollution Control Board, who know that future market-based mechanisms to control air pollution will depend on quality, real-time data.

Initial findings show that, without real-time monitoring, there is significant non-compliance: at baseline, over 70% of the industries surveyed were found to emit over the legal standard. Second, in the absence of incentives, air pollution control devices were poorly maintained. Third, a market-based regime could reduce emissions at low cost – we estimate a 55 percent reduction in costs for industries relative to fixed standards.

CEMS represent an important breakthrough in the industrial pollution regime in India, which has historically relied solely on manual (hence infrequent) measurement of plant emissions. By enabling regulators and industries to view minute-by-minute industrial pollution data, these new systems strive to improve transparency of information exchange, incentivize pollution abatement and reduce compliance costs. We expect to observe an improvement in the effectiveness of industrial pollution regulation as regulators now handle sophisticated data, and receive better information regarding plant emissions.

Principal Investigators:
Rohini Pande
Anant Sudarshan. University of Chicago
Michael Greenstone, University of Chicago
Nicholas Ryan Yale University