A pollution theory of value

Environmental policies in effect add polluting emissions to the list of society's limited resources. As a consequence, they necessitate the estimation of a new system of values that will relate social ends and economic activities in a regime of optimum resource allocation. The purpose for formulating the theory presented in this paper is to illuminate the nature and assist the determination of these values when emissions are regulated. In discussing the theory's contributions, I place emphasis not on the normative properties of the theory but rather on the potentials it offers for an integrated environmental policy evaluation within a social context. The theory is founded on the concept of productive efficiency and the related concept of accounting prices for resources and for the products of resource utilization.