As we saw in the previous chapter, the externalities arising from the extraction and utilisation of natural resources have emerged as important components of user costs. These externalities lead to a wide variety of pollution problems involving the contamination of various water resources, air sheds, and various land and subterranean resource systems. These resource systems are, strictly speaking, quasi-public goods. They are also non-renewable assets – but they provide renewable service flows. For example, an air shed and a lake are both quasi-public goods that are also non-renewable assets. However, given the dynamics and linkages of the earth’s physical processes (such as the hydrologic and various gaseous cycles), these resource systems provide renewable service flows, for example, the air we breathe or the water we drink. The contamination of these assets by various pollutants can compromise the renewability of the service flows. So in this chapter, we examine analytic frameworks that will directly target pollution-related issues. Also note that in several instances, because of the public-good properties of the assets, pollution issues fall outside the realm of control of individual consumers and firms. Hence, the measures that deal with the issue of pollution invariably involve some form of government intervention.