In what could be the first step towards a market-based system of pollution permits, the government plans to roll out a Rs.500-crore online pollution monitoring system across 6,000 industrial sites across the country.

The Central Pollution Control Board (CPCB) has been asked to prepare a national action plan for online pollution monitoring based on the model being implemented in Tamil Nadu, according to Union Minister of State for Environment and Forests Jairam Ramesh. He was interacting with representatives from the Central and State Pollution Control Boards and non-governmental experts, at a workshop on innovative instruments for environmental regulation here.

The Tamil Nadu Pollution Control Board launched its Care Air Centre last month to assess real time emissions from factories in the Manali industrial area. Censors have been put in place in the smokestacks, as well as to measure the ambient air around nine plants at Manali, to measure the levels of sulphur dioxide and nitrogen dioxide. The data is transmitted every ten seconds to the Care Air Centre.

Mr. Ramesh said that while the system would cover 202 sites in Tamil Nadu by the end of the year, it will be expanded across the country to cover the entire organised industrial sector — approximately 6,000 sites. It is still being debated who will pay the Rs. 500 crore cost of setting up the system.

However, this system could then be used to power a system of pollution permits, the Minister said.

“An inspection-based system is simply not sustainable,” said Mr. Ramesh. “If we think we're going to create more and more laws, and put in more and more inspectors on the field and expect companies to comply, it's just not going to happen. In my view, a market-based system is the only solution in the long run.”

Michael Greenstone, an Economics professor at the Massachusetts Institute of Technology, suggested that giving companies permits for allowable amounts of pollution and allowing them to trade it would result in much larger reductions at much lower costs. “Since some industries face much higher costs of reducing pollution, they can buy pollution permits in the market from other industries that have a lower cost,” he said.

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