Emissions trading success in India inspires Brazil’s Rio
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Textile manufacturer Swastik Poly Prints in Gujarat, India reduced its particulate matter emissions by at least 30 percent after joining a local emissions trading scheme (ETS) in 2019.
The ETS allows companies to buy and sell permits for pollution, incentivizing them to reduce emissions and improve efficiency. Emissions Market Accelerator (EMA) developed the system in Gujarat, where factories participating in the ETS lowered particulate pollution by around 24 percent compared to those under standard regulations.
Now, the city of Rio de Janeiro, Brazil is considering adopting a similar market-based approach to tackle industrial pollution after officials observed Gujarat’s success at the 2025 Earthshot Prize event. EMA and Rio de Janeiro are currently in legal review of a memorandum of understanding to establish a partnership and determine the specifics of the program, including which pollutants to regulate and how to set emissions caps. While the Gujarat model offers a promising example, experts note limitations.
The initial pilot focused on emissions from factory stacks, not overall air quality, and questions remain about data transparency and the capacity of regulatory bodies to manage such a market. Despite these concerns, the Gujarat experiment demonstrates the viability of emissions trading in developing nations, and EMA estimates that 80-85 percent of the model could be adapted to other regions.
