[cool_dude85]

The optimal level in your opinion probably depends heavily on how close you live to that factory.

Anyway even if you want to live in Cass Sunstein land where everything is a cost benefit analysis then you have to work on some really hard problems like how it's not really possible to fairly cost something like a person getting cancer. It's also really hard to fairly compare them to the extremely diffuse "benefits", like the oil company doesn't need to spend a million bucks to install a scrubber so everyone's gas is 1 one trillionth cent per gallon cheaper on average.

Point is this kind of cost benefit stuff is a buck passing truism unless and until we can solve these problems and more. I won't be holding my breath.

[hcurtiss]

The answer, IMHO, is to assign property rights and let people trade for the optimal outcome. People frequently and willingly make transactions that on average shorten their lives in exchange for short term benefits (e.g., eating at McDonalds or drinking alcohol). There are tools to address the problem of transaction costs.