Abstract
One of the important problems in environmental management is the sharing of responsibility for cleaning the pollution. It may happen that a particular region may suffer pollution caused by the production of inputs and outputs which are consumed outside the region. This is also further complicated by the diffusion of pollutants over space. Within the framework of a balanced regional input–output model, a scheme for subsidy/tax has been presented so that interregional equity is maintained. Pollution control strategies must result in regional unemployment, migration, capital movements over space, changes in interregional competitive position, etc. A dynamic scheme is suggested so that, given some exogenous policy decisions and technological constraints, the activity levels of production in different regions are determined so that the system is in equilibrium.
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