Treatment requirements imposed on individual firms were seen as the most direct response to pollution problems. In the climate of the early 1970s, and given the lack of regional institutions in place, the desire to minimize compliance costs and use taxes to meet ambient goals was less strongly felt. This is one explanation for the quantity-based regulatory system we have in place to this day. To understand some of the other explanations, it is necessary to describe the characteristics of a tax system in more detail. Before doing so, mention should also be made.
