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Pollution of the environment is becoming an increasingly serious problem. A large contributor to this is industry which generates effluent as a by-product of its production process. Two methods of controlling the pollution generated by industry are the so-called “command and control” techniques and economic incentives. In theory, economic incentives promise a more economically efficient and equitable means of pollution control. This paper sets out to ascertain whether this would hold in practice by applying environmental economic theory to the practical problem of controlling the effluent generated by one particular industry, viz the South African leather industry.


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