As toxic air continues to choke Indian cities year after year, researchers at the Energy Policy Institute at the University of Chicago (EPIC) have found promising evidence that market-based solutions like emissions-trading schemes can help industries slash pollution without hampering economic growth.
An emissions-trading scheme works by setting a cap on total emissions and allows companies to buy and sell emission permits. This creates a financial incentive for businesses to cut emissions in cost-effective ways, either by upgrading equipment, switching to cleaner fuels, or investing in innovative low-carbon technologies.