The cost of air pollution abatement

Data on 100 000 US factories is used to develop comprehensive abatement cost estimates by industry sector for seven major air pollutants. The results reveal very high intersectoral variances in marginal and average abatement costs: maximum/minimum ratios are frequently near 10, and occasionally near 100. The implications of these new estimates are discussed for three policy issues: (1) the relative accuracy of forecasts from econometric and engineering projections for environmental policy analysis; (2) the cost of command-and-control regulation of air pollution in the US; and (3) the use of benefit-cost analysis for setting air pollution control priorities in developing countries.