How India can use better data and regulations to stop industries from choking its cities

Why does India have 14 of the world’s 20 cities with highest air pollution when it has set limits and stipulated strict criminal punishments to enforce them? And what's a possible solution?

Written by Michael Greenstone, Rohini Pande , Anant Sudarshan , Santosh Harish | New Delhi | Published: August 13, 2018 8:32:07 am
delhi air pollution A family arrives at a protest against air pollution in New Delhi, India.File photo (AP Photo)

Fourteen of the world’s 20 cities with highest air pollution are in India, according to the World Health Organization’s (WHO) last ranking. Why is this the case, when India has set pollution limits and stipulated strict criminal punishments to enforce them?

One reason is that rules are only effective when people follow them. Several studies have shown that there are wide gaps between what regulation says on paper and how industry and the public act on the ground. Indeed, our research suggests that if India met its own air pollution standards, life expectancy in India could increase by almost 1.5 years on average, and if the country met the WHO’s standards, that number goes up to roughly 4 years.

How can we improve matters?

The shortcomings of regulation

First of all, let’s look at why regulations have failed to bring pollution levels down to the standard. Typically, environmental regulation in India relies on an inflexible set of rules, which does not seem to work well in practice. Despite the threat of harsh punishments, factories we tested in Gujarat, Maharashtra, Tamil Nadu, and Orissa over the course of several years exceeded emission limits over half of the time. Similarly, a study by the Central Pollution Control Board found that vehicle testing centres in Delhi were often inaccurate, suggesting that certification for cars may not mean much.

Different approaches may work better – ones that take a more nuanced view of human behaviour based on the incentives people face, and that employ new technologies that are growing cheaper and more accessible.

Polluters generally won’t take costly measures to reduce pollution if punishments for violations are rare. Why pay when you won’t get caught? This attitude, in turn, may be an unintended effect of policy: because environmental law relies on criminal penalties, regulators’ primary method for enforcement is to shut down plants and hold up investment, both of which are costly and can undermine economic growth. Our research finds that, as a result, regulators punish only a small fraction of major violators, and often let plants off with no penal action.

The goal of regulation should be twofold: Make it hard to hide polluting behaviour, and ensure that reducing pollution is never more expensive than it needs to be.

Enable new monitoring techniques

With industrial pollution, much of the problem is the difficulty of obtaining reliable measurements of factory emissions and acting on the results. Typically, regulators or third-party auditors conduct factory inspections only occasionally, at which point they take readings that the court can use to mete out punishments. Not only does this leave emissions unmeasured most of the time, it relies on the honesty of a small group of individuals who are reporting pollution levels. Research has shown that auditors hired and paid by factories tend to under-report violations.

Because of these problems, state and central governments have begun to require the use of technology to automatically, and continuously, monitor the pollution being released by factories. While this is an important step, there is a high risk of the information generated by these instruments being unused or unusable. There are two major reasons.

First, large volumes of new data need to be routinely used by pollution control board officials in enforcing pollution norms. However, since the technology is still unfamiliar, pollution control boards need to build capacity and evolve new processes to consume this information effectively.

Second, these instruments need to be calibrated at regular intervals so that the reported measurements correspond accurately to true pollution levels. If not done properly and with sufficient regulatory oversight, the reported data is likely to be biased. We have been working with the Gujarat and Odisha State Pollution Control Boards in taking steps to fix these issues, and our findings may guide improvements to monitoring systems nationwide.

Make pollution data transparent to the public

Ultimately, the costs of pollution fall on citizens. Around the world, countries have made pollution data completely transparent and accessible. The idea is to enlist the public to put pressure on industries to report accurately, and become cleaner. Examples include the PROPER scheme in Indonesia and the Green Watch programme in China, both of which were found to be effective in reducing pollution.

Certain states in India have begun to take innovative steps in this direction. We are collaborating with the Maharashtra Pollution Control Board on a new Star Rating programme launched in 2017. Under this rating, industries are ranked on a 1 to 5 star scale based on their past pollution tests and this information is made freely available. This pilot is growing rapidly to cover the state and we are conducting a rigorous evaluation of its effects on industry pollution. The state of Odisha has also announced that it will soon launch a similar initiative.

These schemes cost little to implement, and if more states adopt them, India could experience a revolution in environmental transparency. Industry already competes for profits – pollution ratings could make them compete to be greener as well.

Move toward a market where firms pay to emit pollutants

In an emissions market, the government sets a cap on amount of a pollutant allowed across an industry, then lets firms bid and trade for the right to emit part of that total. Similar markets are already in use in environmental policy around the world and have a number of benefits, such as giving already-clean plants incentives to further reduce their emissions.

We believe that a market for particulate emissions in India could dramatically lower air pollution, while reducing the costs of compliance. Not only is the good for growth, it is in line with the “polluter pays” principle, which has been repeatedly invoked by the Supreme Court of India.

We worked with the Central Pollution Control Board and the Gujarat Pollution Control Board to collect detailed information from industries in Surat. Based on this data, we predicted that the overall costs to industry of reducing pollution under a market would be up to 40 per cent lower with emissions trading than under current regulation. NITI Aayog recently advocated markets and emissions charges, and an important judgement by the National Green Tribunal held that emissions charges are legal and desirable. The way is clear for India to put these ideas into practice.

Michael Greenstone is the Milton Friedman Professor in Economics, the College, University of Chicago, Director of the Energy Policy Institute at the University of Chicago (EPIC), and co-chair of the Abdul Latif Jameel Poverty Action Lab (J-PAL) Energy and Environment sector. Rohini Pande is the Rafik Hariri Professor of International Political Economy at Harvard Kennedy School, co-director of Evidence for Policy Design (EPoD), and co-chair of J-PAL’s Political Economy and Governance sector. Anant Sudarshan is a senior Research Associate at the Department of Economics, University of Chicago and the South Asia Director of EPIC. Santosh Harish is Associate Director - Research of the India center of the Energy Policy Institute at the University of Chicago (EPIC- India).

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