This paper reexamines the link between pollution, abatement policies a
nd economic growth. We develop a Lucas variety of endogenous growth mo
del to formalize the effects of pollution and abatement on growth. Pol
lution is linked to the scale of production; it has a negative impact
on productivity both in directly productive activities and in the lear
ning process. This effect may be mitigated by abatement activities the
efficiency of which can be enhanced by investing in abatement technol
ogy. We show that less (effective) pollution is associated with higher
growth in the steadystate. Also the short term effects are examined,
and finally, we discuss the optimal government policies with respect t
o abatement and taxation.