The choice of efficient pollution policies: Technology and economics in the control of sulphur dioxide

This article reexamines the choice between charges and regulations to control pollution, by concentrating on the example of sulphur dioxide. A summary of the technology of this pollutant is followed by a discussion of the informational requirements of alternative policies. Particular attention is paid to the distinction between continuous monitoring and spot checks, to the number of polluters, and to the relationship between inputs to the polluting process and emissions. The final section considers how the issues dealt with would apply to water pollution and concludes that charges are not a priori always preferable to regulations.