Among strategies for the improved abatement of pollution, Congress has overwhelmingly preferred the traditional regulatory approach, as exemplified in the standard-setting mechanisms of existing legislation for federal water and air pollution control. However, in recent years, proposals for federal legislation that creates economic incentives of various kinds have attracted congressional attention. The Tax Reform Act of 1969 includes such an incentive in §169 of the Internal Revenue Code, which now permits the taxpayer to amortize over a five-year period a portion of the cost of his investment in qualified pollution control facilities.¹ IRS guidelines for implementing the amendment are set out at 36 Fed.Reg. 9017 (May 18, 1971). EPA has also published guidelines for determining which facilities qualify for the tax writeoff. 36 Fed.Reg. 9509 (May 26, 1971).

An economic incentive may be broadly defined to include all types of financial constraint, i.e., all social policy implements that attach a money penalty, or reward, to the performance of an activity. No list of possible variations of economic incentives could be exhaustive, given this broad definition, but analysts readily distinguish incentives as either positive or negative. Negative incentives, or disincentives, attach a cost to the performance of an activity. A disincentive, for example, may take the form of a tax, a damage payment, a charge, a penalty, a fee, or even the establishment of a limited number of salable pollution "rights".² Positive incentives attach rewards to the performance of an activity. They include subsidies, bounties, low-interest loans, grants, accelerated depreciation, tax credits of various kinds, and favored treatment in government contracts. The new provision of §169 is just such a positive incentive.