... policy, a firm would be free to decide how to bring the net level of pollution within standards, as against installation of mandated stack-by-stack equipment. The policies were however complex and approval by authorities was subjective. Company Options Gartland Steel had to change its production policy to comply with the new pollution norms. One of the possibilities was of buying a factory for $750,000 and get an additional allowance of 250,000 pounds/year of pollution "offset". The company could also think of changing the production mix in the open hearth furnace, now requiring 0.25 tons of pig iron (instead of 0.14 tons) and 0.95 tons of scrap (instead of 1.08) creating 1 ton of steel and 0.2 tons of scrap. The pollution would decline to 0.795 punds/ton (instead of 0.861 pounds/ton) and the operating cost of the furnace would also reduce by $5/ton. The major source of pollution for the plant was from ...

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