ABSTRACT
The problem of pollution or environmental deterioration is not new, but the necessity to take appropriate measures against pollution and for preservation of natural resources has gained momentum since the late sixties. The general public, political organizations and industries made efforts to understand and to solve environmental problems. The limited capacity of the environment to assimilate pollutants serves as a productive resource similar to other resources, but unlike labor and capital, it represents an immobile supply factor. Hence, economic activities at national and international level, on one hand, are influenced by environmental assimilative capacity and pollution which reflects the degree of utilization of this immobile supply factor. Changes in price system including fiscal charges may affect sectoral structure of final demand for final goods and for investment. Specific industries like electric utilities may face serious capital shortages, and the investment required for environmental control (EC) may displace investments to expand or to modernize production.
