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over very long periods, severely limit the options available to policy-makers. The countries of Central and Eastern Europe are a dramatic demonstration of the manner in which environmental liabilities can destroy the capital base of enterprises that appear to be going concerns.

It is often said that current generations must not appropriate the possibilities of future generations to utilize environmental resources. In practice, the current generation already faces a situation where past practices have elimited numerous options that might otherwise have been available. This may require appropriate investments to remediate environmental problems and sometimes can produce rapid results. It may also foreclose any possibility of using certain substances. For example, it is well known that the characteristic London smog that persisted throughout the first half of this century was attributable in large measure to the practice of burning coal in open fireplaces to heat private residences. The smog events were successfully curtailed by banning this practice. Less well known is the fact that the burning of coal also involved emissions of trace amounts of lead. Since lead is not very mobile once emitted into the environment, these lead emissions have accumulated in the soil and are to be found in dust. As a consequence, the London environment is intolerant to additional emissions of lead—for example, from gasoline—and the United Kingdom presses for a more rigorous elimination of lead from other products than is advocated by most other EC countries. Even while the United Kingdom began to confront the health hazards posed by this lead reservoir, Germany assessed the health risks of lead in the environment and concluded that they were not sufficient to push for the elimination of lead additives in gasoline; however, the desire to limit sulfur and nitrogen oxide emissions from automobiles to reduce acidification (and to permit forests to recover from the accumulated acidifying deposits) caused the German government to advocate the introduction of unleaded gasoline almost simultaneously with the British, but for other reasons. The United States failed to adopt the White Lead Convention when it was agreed to by the International Labor Office in 1921. As a result, paints laced with lead continued to be used in US dwellings for fifty more years, creating a huge reservoir of lead, which will be released into the urban environment over centuries and create conditions similarly intolerant of additional lead burdens, albeit for different reasons again.

Economic Conditions and Social Preferences

There has been a vigorous debate in Western countries concerning the association of strong environmental policies and elevated levels of economic activity, particularly as measured by gross domestic product. Some observers view environmental quality as a luxury good for which demand rises as disposable income rises.7 Many of these observations are based on empirical data derived from the past twenty years of environmental policy showing that levels of sulfur dioxide emissions started to fall as GDP grew beyond a "threshold" of approximately

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