This paper develops a methodology for estimating potential cost savings from the use of market-based
instruments (MBIs) when local emissions and abatement cost data are not available. The paper provides
estimates of the cost savings for a 50% reduction of particulate emissions in India’s five main industrial
states, as well as estimates of the benefits from doing so. The estimates are developed by applying World
Bank particulate intensity and abatement cost factors to sectoral output data. The estimated costs savings
range from 26% to 169% and the benefits are many times greater than the costs even without the use of
MBIs. The paper concludes by commenting on the relative difficulty of implementing reductions by
market-based instruments and conventional command-and-control regulations.