An emerging coalition is implementing carbon trading despite political obstacles. It is rewriting the map of climate diplomacy, says Michael Grubb.

Will the market-based approach to controlling air pollution prove more effective than enforcement methods used by pollution control boards? After failing to check air pollution through the usual enforcement methods, the Union Ministry of Environment and Forests (MoEF) has introduced a market-based mechanism to reduce air pollution. It is called the Emissions Trading Scheme (ETS). The ministry has initiated a pilot ETS in industrial areas of three states—Gujarat, Maharashtra and Tamil Nadu—with the aim of improving overall ambient air quality.

Industries that over-achieve targets will be awarded energy saving certificates that can be traded like carbon. With the aim to make the industrial sector energy efficient, India’s Bureau of Energy Efficiency (BEE) launched its 'Perform, Achieve and Trade' (PAT) scheme on July 4. The scheme has set energy efficiency targets for industries. Those that fail to achieve targets will have to pay penalty. PAT has been launched under the National Mission for Enhanced Energy Efficiency, one of the eight missions under the umbrella National Action Plan on Climate Change, launched in June 2008.