ABSTRACT
This chapter discusses R. U. Ayres and A. V. Kneese's work, and examines the more pragmatic approaches taken by W. Isard and H. E. Daly. The fundamental idea embodied in the Ayres-Kneese model is that of materials balance. Ayres and Kneese argue correctly that 'almost all of standard economic theory is in reality concerned with services'. Professor Cumberland is to be credited with designing the first input-output table that incorporates economic and environmental interactions. Daly's plan is to bring purely economic interrelations, purely environmental interrelations, and relations between the economy and the environment into one comprehensive model. Isard's designation of the coefficients as 'interprocess coefficients' implies a one-to-one relationship between commodity outputs and industries. W. Leontief has developed a model which can be used to estimate price effects of changes in anti-pollution technology and also of alternative government policies for regulating industrial pollution.
