The problem of predicting cost associated with the environment around us is complex. In this paper a Regional Economic Leontief Input-Output is calculated as a function of an air pollutant, sulfur dioxide. The model presented is a multi-stage optimization model which uses linear programming. The model uses an objective function to be optimized subject to the flow of the Leontief Input-Output model and environmental level constraints. The model is dynamic in a Markovian sense in that each stage is dependent only on the previous stage. This dependency arises from the way the environmental variable and excess demand are handled. The environmental variable level for stage n + 1 is determined in stage n and the excess demand from stage n is carried over to stage n + 1. An example is used to demonstrate the use of the model.

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