A framework is concisely presented for the economic analysis of pollution problems and for evaluating proposed solutions. The substantial recent literature on environmental economics is reviewed and related to Ontario environmental policy. Topics include the theory of externalities as an explanation of environmental problems, policy objectives, costs of information and monitoring, and the impact of these costs on control policy selection. Three case studies of specific pollution problems – sulphur dioxide from a smelter, lead from downtown factories, and urban automobile emissions – are given, and possible solutions explored.

The authors' methodology is applicable not only to air and water pollution but also to noise, aesthetic degradation, and solid waste. This study will be welcomed by specialists, civil servants, and students trying to understand the economic aspects of environmental maintenance.

Donald N. Dewees is a professor in the Department of Economics at the University of Toronto.

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C.K. Everson was a visiting member of the Department of Economics at Erindale College.

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William Sims is a professor emeritus of economics at Concordia University.

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