Abstract Title: | Simulating Cap-and-trade for Particulate Matter using an Agent-Based Model |
Session Choice: | Indian Regulations |
Presenter Name: | Ms Rashmi Krishnan |
Company/Organisation: | J-PAL South Asia at IFMR |
Country: | India |
Abstract Information :
This research employs an Agent-Based Model to simulate a cap-and-trade system among
roughly 120 small-scale, solid fuel-burning industries across six industrial clusters in Surat,
Gujarat. We evaluate the effectiveness of trading permits for Particulate Matter (PM)
emissions using techno-economic data collected from our sample of industries to construct
Marginal Abatement Cost (MAC) curves for each cluster. Industrial data include revenue
details, fuel use, and utilization of Air Pollution Control Devices (APCDs). All industries in
our sample have successfully installed Continuous Emissions Monitoring Systems (CEMS)
for PM measurement as per CPCB guidelines (Central Pollution Control Board, 2013). To
evaluate effectiveness of the market, we compare costs and levels of abatement with those
associated with the status quo (uniform legal standard of 150mg/Nm3). The model is
constructed using NetLogo v6.0.1 (Wilensky, 1999).
Pollution regulation in India is in desperate need of renovation. As of today, environmental
regulators rely on the conventional command-and-control approach to control pollution. Very
simplistically, this requires enforcing an absolute technology-based or performance-based
standard with severe penalties upon non-compliance. This environmental regime is not only
costly for regulators and the regulated; it is also grossly inefficient, lacks transparency and
operates with little or no reliable information (Duflo, Greenstone, Pande, & Ryan, 2013;
Stavins, 2003).
In theory, the reason that emissions markets are able to reduce pollution at lower cost than
non-market methods is because, under an emissions market, the plants with the lowest
marginal costs of abatement undertake the most abatement, and those with higher costs do
not cut pollution as much or at all. We expect to see lower mean PM emissions across each
cluster as well as savings in abatement costs in comparison with the status quo (Fowlie,
Holland, & Mansur, 2009). However, we expect cost savings to reduce with more stringent
caps. This research is an extension of an ongoing project with the Ministry of Environment,
Forests & Climate Change and the Central Pollution Control Board.