This paper measures the cost of reducing pollution from the Kanpur leather industry which is a prime source of pollution in India’s largest river basin of Ganges. The study uses directional distance function approach to examine the efficiency of leather firms in abating two undesirable pollutants (total suspended solids and chromium) while expanding the desirable leather output, and provides robust estimates of the marginal abatement cost for different production and pollution abatement strategies. The study is based on the primary data collected for 61 firms in Kanpur leather cluster for the year 2016. The results show that leather firms are technically inefficient and incur high abatement cost under the existing command and control regulations. The least inefficient strategy is a balanced policy that allows firms to reduce pollution without compromising their goal of output expansion. The study finds that old, small and more pollution intensive firms can abate pollution at least cost under a market-based regime. The shadow price of pollutants estimated in this paper are useful tools in determining equilibrium discharge permit price for design of market-based instruments.

本文衡量了减少坎普尔皮革业污染的成本，坎普尔皮革业是印度最大的恒河流域的主要污染源。该研究使用方向距离函数方法来检验皮革公司在扩大所需皮革产量的同时减少两种不良污染物（总悬浮固体和铬）的效率，并提供了针对不同生产和污染减少策略的边际减排成本的可靠估计。这项研究基于2016年坎普尔皮革集群中61家公司收集的主要数据。结果表明，在现有的命令与控制法规下，皮革公司的技术效率低下，减排成本较高。效率最低的策略是一种平衡的策略，该策略允许企业减少污染而又不损害其扩大产出的目标。研究发现，在以市场为基础的体制下，老旧的，小型的和污染密集型企业至少可以降低污染成本。本文估算的污染物影子价格是确定基于市场的工具设计的平衡排放许可价格的有用工具。