Three Out-Of-The-Box Policy Ideas to Clean up India's Toxic Air

Market-based solutions instead of command-and-control regulation could allow economic growth to coexist with cleaner air.

One out of every eight deaths in India in 2017 was caused by air pollution, according to a study. That’s almost twice as many deaths caused by cancer.  This is a grim warning to India’s policymakers.

No longer just a middle-class inconvenience in the winter, air pollution has become a year-round health emergency across India. Delhi experienced only two ‘good’ air days over two years, between May 2015 and October 2017. Moreover, the WHO’s air quality database (as of 2018) showed that all 126 Indian cities exceeded the recommended guidelines for particulate emissions.

Despite numerous warnings from scientists and much public criticism, policymakers have been unable to implement any comprehensive solutions to tackle air pollution. Worsening air quality is also an indictment of the faulty bureaucratic approach to environmental regulation.

Also read: Watch: Why Farmers Are Burning Stubble in Punjab

Inflexible command-and-control policies, such as the Delhi government’s odd-even scheme, have failed. There are no  incentives for businesses and citizens to change their emission patterns, and the schemes themselves are shoddily implemented.

The recent National Clean Air Programme (NCAP) targets a 20%-30% reduction in PM2.5 and PM10 emissions but doesn’t offer any concrete solutions or adequate funding (only Rs 300 crore) to achieve it. The NCAP will certainly strengthen air pollution monitoring across India  – but doesn’t represent the kind of innovation needed to tackle the major sources of pollution. Here are three ideas.

Introduce a federal cap and trade scheme for industrial pollutants

Air pollution requires a federal solution because state-level regulation can’t  deal with the problem’s transboundary impact. A national cap-and-trade scheme for industrial pollutants could be effective in curbing industrial emissions.

The idea is to set a cap on the total industrial emissions at the national level, and lower the permitted target over time. This would create a market for pollutants and encourage companies to invest in abatement technologies to avoid paying stringent penalties.

Tamil Nadu, Maharashtra and Gujarat trialled a pilot emissions-trading scheme in 2011. It used a comprehensive emissions management system to provide real-time information on industrial emissions to the government.

This experience should enable environment regulators to implement a cap-and-trade programme in industrial clusters around the country. It could help deal with the problem without damaging economic competitiveness.

In 1990, the US successfully implemented a cap-and-trade scheme to solve an acid rain problem caused by sulphur dioxide emissions from coal power plants. Despite fears of economic losses, the firms saved $240 million a year relative to a command and control alternative. The program also reduced emissions from the power sector by 36% while coal-fired electricity output increased by 25%.

The US example demonstrates that cap-and-trade doesn’t have to hurt the economy. And when implemented over industrial clusters, it needn’t impose additional socio-economic costs on underprivileged citizens.

Incentivise a shift in cropping patterns among farmers in North India

Crop burning has resisted  technical solutions pushed by the administration. The government wanted to give farmers in Punjab and Haryana “happy seeders” at a subsidised cost. The seeders allow farmers to plant seeds without having to  clear older paddy fields. However, farmers deemed the technology too expensive and the plan failed.

It also doesn’t address the root-cause of paddy burning. The Punjab and Haryana governments mandated in 2009 that farmers could only plant the water-intense paddy crops in mid-June. This was to prevent groundwater depletion in the summer and delay paddy cultivation till  the monsoons.

However, this left farmers little time to shift to planting winter crops after their October harvest. So as an alternative, they burnt the stubble off the paddy fields.

In this context, instead of exploring silver-bullet solutions like the ‘happy seeder’, the government should incentivise crop diversification.  Restricting paddy cultivation in North India could also protect soil fertility and curb groundwater depletion.

It’s notable that in the early 1970s, these parts of Punjab and Haryana neither cultivated nor ate rice. But higher procurement prices and electricity subsidies (to extract groundwater) encouraged them to shift from maize to rice.

Offer citizens incentives to trade ‘dirtier’ vehicles for cleaner ones

The Centre has decided to implement the  BS VI fuel norms from 2020 to curb automotive emissions (we’re currently at BS IV). Although this is admirable, it’s unlikely to have a significant impact on transport emissions in the coming decade, chiefly because consumers have little incentive to shift to cleaner but more expensive vehicles.

A 2016 study in the US demonstrated that tightening the fuel economy helped increase the  average vehicle lifetime by over three years . The study’s authors also found that consumers responded strongly to scrappage if they were guided by  vehicle price, and they retained their vehicles for longer.

Also read: The Smog That Hides a Bonanza

The takeaway for India is that the BS VI fuel standards could result in older, more polluting cars plying India’s roads for another decade. Implementing a scrappage programme with incentives to trade older vehicles in for newer, cleaner ones could curb automotive emissions much sooner.

It has been reported that 700,000 vehicles manufactured before 2001 contribute 15-20% of vehicular pollution. A scrappage scheme could take these vehicles off the road and replace them with vehicles that are BS VI compliant. And under the new standards, commercial and heavy-duty vehicles have better emission control technology and are much less polluting than older models.

Many policymakers believe that air pollution is the price Indians have to pay for economic development. That doesn’t have to be the case. Market-based solutions instead of command-and-control regulation could allow economic growth to coexist with cleaner air.

Siddharth Goel is an independent public policy consultant with extensive experience in India, the US and Europe. He writes about innovative public policy ideas on his blog, Rethinking Public Policy.