This paper is concerned with trying to explain why governments have not taken more notice of economists' suggestions with respect to pollution control policy. Four possible explanations are considered: ignorance; theoretical problems; practical problems; and institutional or cultural factors. It is concluded that economists have been too narrow in their focus on efficiency as an appropriate objective function for legislators and pressure groups, and that there are numerous problems associated with bringing in incentive-based policies for the control of pollution. However, the basic attraction of such policies—that by permitting flexibility in emission reductions across sources, cost savings are made possible-remains sufficiently strong to warrant more research attention being given to modelling such policies in specific situations.
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