Surat Becomes World’s First City to Trade Pollution—and Win

In a historic environmental breakthrough, the industrial city of Surat in Gujarat, India, has become the world’s first to implement an Emissions Trading Scheme (ETS) for particulate pollution. Since its launch in 2019, the innovative program has cut emissions by 24% from participating industries—all without increasing production costs.

Innovative Approach

Unlike traditional pollution control methods that rely heavily on regulations, Surat’s ETS takes a market-based approach. It introduces a cap on the total amount of particulate matter industries are allowed to emit. Companies are granted emission permits under this cap, which can then be traded. Those who emit less than their quota can sell the excess to others, turning pollution control into a financial opportunity.

How It Works

At the heart of the system is real-time monitoring. Each participating factory is equipped with Continuous Emission Monitoring Systems (CEMS) that track emissions 24/7. The data flows into a centralized digital platform that ensures transparency and trust. Initially, most permits were distributed for free, while a portion was auctioned to establish a functioning emissions market.

This dynamic mechanism encourages industries to invest in cleaner technologies. The cleaner they operate, the more permits they have to sell—and the more profit they can make.

Real Impact

The results speak volumes. A significant 24% reduction in particulate emissions has been recorded among industries involved in the program. Remarkably, this was achieved without increasing operational expenses. In some cases, companies even gained additional revenue by selling unused permits, showing that environmental reform can also mean economic reward.

What’s Next

Encouraged by the success in Surat, plans are already in motion to replicate the program in other industrial cities such as Ahmedabad. The aim is to extend the benefits of this model—lower pollution, healthier communities, and sustained industrial performance—across the state and potentially the country.

A Blueprint for the Future

Surat’s emissions trading success proves that innovative, market-driven solutions can tackle even the most persistent environmental challenges. With cleaner air and profitable industries, the city has created a model for the world—showing that smart policy, technology, and cooperation can pave the way for sustainable urban living.