Emissions Markets in India: Developing a Cap and Trade Scheme for Particulates
Last registered on February 24, 2019


Trial Information
General Information
Emissions Markets in India: Developing a Cap and Trade Scheme for Particulates
Initial registration date
February 22, 2019
Last updated
February 24, 2019 7:36 PM EST

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Primary Investigator
University of Chicago
Other Primary Investigator(s)
PI Affiliation
University of Chicago
PI Affiliation
Yale University
PI Affiliation
Harvard University
Additional Trial Information
On going
Start date
End date
Secondary IDs
India today has the highest levels of air pollution in the world. Of the 20 most polluted major cities in the world, 13 are in India, and high levels of air pollution are estimated to cost India’s citizens a collective 3 billion years of life expectancy. Therefore, bringing down air pollution will have enormous benefits for India’s citizens in terms of health and productivity. This project suggests a solution to reduce industrial air pollution and enhancing air pollution while at the same time reducing regulatory costs for plants. The main intervention is to introduce a new market for particulate matter air pollution, and study the effects on pollution and compliance costs for a group of industrial plants compared to the traditional command-and-control regime. If successful, this will directly identify one policy lever to improve the well-being of Indian citizens and provide proof of concept for the viability of carbon trading should India pursue significant carbon mitigation policies.
External Link(s)
Registration Citation
Greenstone, Michael et al. 2019. "Emissions Markets in India: Developing a Cap and Trade Scheme for Particulates ." AEA RCT Registry. February 24. https://www.socialscienceregistry.org/trials/3860/history/41956
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Experimental Details
In partnership with the Gujarat Pollution Control Board we will implement a cap and trade market in particulate emissions in the city of Surat. The market covers a treatment group of participating plants drawn from a sample of solid fuel burning factories in Surat.

Pollution monitoring for the market is done using Continuous Emissions Monitoring Systems. These systems will be randomly phased in for all plants that will be in the market allowing for an additional evaluation of the effects of CEMS alone.

In the first phase during which the experiment will run, the control group will remain under status quo regulation (command and control based concentration standards). The treatment group will be provided emissions permit that they can trade. Equally sized treatment and control groups will be generated based on random assignment of the sample of solid fuel burning plants.

The market is expected to run for one year with a reconciliation period at the end of that period. This is also when we expect to run an endline survey to measure outcome differences between market participants (treatment) and the control.
Intervention Start Date
Intervention End Date
Primary Outcomes
Primary Outcomes (end points)
The key outcome variables are change in particulate matter emissions among the industrial plants and their abatement costs
Primary Outcomes (explanation)
Secondary Outcomes
Secondary Outcomes (end points)
Secondary Outcomes (explanation)
Experimental Design
Experimental Design
The primary evaluation in this study is the impact of a pollution trading market on environmental and economic outcomes. A preliminary evaluation is of the effects of installing CEMS alone.

For the CEMS evaluation the study uses a randomized phase-in design for the evaluation of the new CEMS monitoring regime in the sample industries with the goal setting up a market for trading emissions among industrial plants. The first phase of the project is to set up and integrate the use of CEMS technology into the current regulatory framework and evaluate it. This evaluation will exploit the fact that CEMS will be introduced in phases will plants randomly assigned to early and late phases. This allows for a comparison of polluting behaviors in later phases to those that had CEMS installed earlier.

The second and the final phase will be to create a market for particulate matter air pollution to test how much emissions trading can reduce compliance costs for industrial plants, relative to the status quo command-and-control regime. The market will also be phased in, with treatment plants trading in the first year.
Experimental Design Details
Not available
Randomization Method
The randomization was done on Stata by generating a random number and then assigning to each industry. Balance checks were carried out to ensure that the industry characteristics were similar across treatment and control.
Randomization Unit
Industrial Plants
Was the treatment clustered?
Experiment Characteristics
Sample size: planned number of clusters
Sample size: planned number of observations
350 Industrial Plants approx.
Sample size (or number of clusters) by treatment arms
124 treatment industries, 139 control industries (CEMS)

175 treatment and control (Market)
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
IRB Name
Social and Behavioral Sciences Institutional Review Board (SBS IRB) at the University of Chicago
IRB Approval Date
IRB Approval Number