Scientifically, pollution of water, air, and land occurs when foreign material is added to the natural environment in such quantities or at such a rate that the environment can no longer support this material without an appreciable alteration in nature itself. Is this a matter for economics, the study of how man satisfies his wants? For two reasons the answer must surely be an emphatic yes. First, economic activities have been and are involved in creating environmental pollution. Second, economic thinking can be useful in analysing the problem, assisting in the preparation of abatement solutions, and in curtailing future possible...

Contemporary society is dependent on man’s ability to work fundamental changes in the natural environment. Indeed, this society could not exist without large-scale clearing of forested land and plowing of prairies, without substantial changes in natural drainage systems, and without the conversion of rural landscapes into the compact urban places essential for many industrial and commercial processes.

In using resources to produce high and rising levels of income, however, effects are often produced that are incidental to the main purpose. Some of these “side effects,” as they might be called, go beyond the economic unit that produces them and may...

Economists have long recognized the need for public regulation of economic activities that result in unwanted side effects. These effects — called “external diseconomies” in the language of economics — may arise whenever market forces alone are insufficient to make an individual bear all the costs resulting from his actions. Air pollution, which results from using air as a waste-disposal medium, is an excellent example of an external diseconomy, since there are clearly no market forces that compel the user to consider the costs he imposes on others. Without regulation, therefore, the air is used as if no such costs...

Water is the medium in which life itself was spawned. It is the major constituent of the human body, an essential ingredient of the air we breathe, the principal feature of our weather, the habitat for myriad varieties of life forms and a major factor in all of man’s undertakings.

It is, on the one hand, a source of awesome violence through deluge and flood and, on the other, an object of unparalleled natural beauty and the fount of spiritual rejuvenation for people of all ages.

For millions of years, man, like the more primitive animals before him, has lived...

The Council recognizes that environmental pollution is far too complex a problem — with a wide variety of technical, economic and social aspects — to be dealt with adequately in a few pages. What follows is merely a preliminary attempt to sketch the dimensions of two of our pollution problems — air and water pollution — as a beginning towards the setting of objectives in this troublesome area. In our future work, we intend to undertake a more extensive and systematic analysis of these and other pollution problems.

Although we recognize that some significant efforts and contributions are already being...

Discussions of pollution and its control or elimination are frequently long on emotive presumption and short on analysis. There is a common tendency on the part of the conservationist and the layman to say pollution is harmful and wasteful — that it is obviously a bad thing — and that therefore it must be eliminated. In the face of the despoliation of our environment this is a plausible position. What other rational response can there be to the mounting evidence that our rivers are being turned into sewers, our city air charged with noxious fumes and our soil contaminated? Yet,...

Smoke is one of the classic examples of external diseconomies mentioned in the writings of Alfred Marshall and his followers. Generations of college instructors have used this form of air pollution as an illustration to help their students to understand conditions under which competitive markets will or will not allocate resources efficiently. By now, the theoretical problems have been explored with the sharpest tools available to economists. The consensus among economists on the basic issue is overwhelming, and I suspect one would be hard-pressed to find a proposition that commands more widespread agreement among economists than the following. The discharge...

Environmental pollution has in recent years become a subject of great public interest.¹ Many public policies have been proposed to control pollution and to improve the quality of man’s environment. Some of these proposals have been implemented. No student of public policy will be surprised to learn that many of these policy measures involve the use of the fiscal system in one way or another. The first political reaction to a newly perceived need such as that for pollution control is probably to impose negative direct controls: “Thou shalt not” dump sewage into lakes from pleasure boats, build cottages without...

… I will discuss some industry aspects of water pollution, but will speak primarily of the experience, policy and plans of my company, not just because I feel some competence in relating our story but because pollution is individual and specific. Each company within our industry, in fact each plant within a company, has its particular circumstances requiring its own technical and economic solutions.

My company is a subsidiary of the Tribune Company, a holding company which publishes theChicago Tribune, Chicago Today, theNew York Daily News, and five newspapers in Florida, notably theFort Lauderdale Newsand the...

This paper is concerned with those actions of business firms which have harmful effects on others. The standard example is that of a factory the smoke from which has harmful effects on those occupying neighbouring properties. The economic analysis of such a situation has usually proceeded in terms of a divergence between the private and social product of the factory, in which economists have largely followed the treatment of Pigou inThe Economics of Welfare. The conclusions to which this kind of analysis seems to have led most economists is that it would be desirable to make the owner of...

We are living today in a paradoxical situation; as the quantity of our usable air, water and soil declines, the demand for it increases. As this happens, we become more and more concerned with the quality of the air, water and soil which is left.

Few would say we should ignore pollution and its attendant problems. But what is to be done about it?

We are all familiar with reports of malodorous rivers, unpotable water, poisoned, unyielding earth and noxious clouds of lung-searing air blanketing our cities and choking their inhabitants. Such graphic descriptions are depressingly familiar and seldom accurate....