ABSTRACT
This chapter explains how economics could contribute to enhancing the quality of the environment. The Federal government is embarking on a major increase in expenditures for reducing pollution and otherwise improving the quality of the environment. Environmental planning is basically a long-term affair. The basic idea is that a product should be valued partly in terms of its burden on the environment. With reference to taxes as an instrument for reducing pollution, an array of alternatives is available. The tax might well be high enough to cover the cost of cleaning up the pollution. Without effective government standards, firms that spend the necessary money for pollution control may find themselves at a serious economic disadvantage as against their less conscientious competitors. Similarly, without effective Federal standards, states and communities that impose such controls may find themselves at a disadvantage in attracting industry, as against more permissive rivals.
