Current environmental emission regulations typically follow a command-and-control approach mandating the installation of state-of-the-art abatement technology to safeguard hard emission thresholds. However, this type of regulation offers no reward for conducting pollution prevention and technological research to reduce emissions below compliance levels through process innovation. Alternatively, market-based regulations stimulate continued improvement of cleaner manufacturing practices by creating economic incentives for sustained waste reduction. The aim of this work is to furnish regulators and manufacturers with a concise tool for quantifying the impact of future regulatory scenarios. The proposed methodology employs realistic mathematical models of pollution abatement operations used in chemical, pharmaceutical, and specialty chemical manufacturing. It assesses the feasibility of treatment options, estimates their cost and expected emissions. Rigorous optimization techniques are introduced for managing regional emission reduction efforts at reasonable cost to manufacturers. The comprehensive mathematical programming formulations will enable plant managers to ascertain expected compliance cost, and regulators to design environmental regulations for reducing regional emissions at tolerable cost to industry. (c) 2006 American Institute of Chemical Engineers AIChE J, 52: 2792-2804, 2006.