Most economic activities pollute. Environmental regulations should serve the public good by providing incentives to reduce pollution caused by economic activity. Economic incentives include pollution taxes, subsidies for pollution abatement, and tradeable permits or allowances to pollute. Because of the political unacceptability of taxes and permits, much regulation imposes command and control measures and provides less incentive to minimize pollution. Efficient incentives would encourage pollution abatement up to the point where the cost of abatement equals the social and private benefit from the improvements in the environment. While these costs and benefits are difficult to measure, many analysts contend that the way environmental laws have been formulated and implemented in the US leads to very inefficient pollution control. This inefficiency can contribute to a decline in economic competitiveness in the long run, although economic studies do not support the ``pollution haven`` hypothesis. Better analysis (foresight) of the cost of transboundary pollution, significant in the Great Lakes region and along the US- Mexico border, as well as in rivers that flow between countries, is needed to formulate more effective policies and avoid sorry hindsight. Also, application of communal experience, technologies, and methods applied to shared problems can avoid costly duplication of searches for the optimal pollution abatement measures. 14 refs
