This article is about the graphical description and analysis of the welfare effects of the Coasean1 transactions between the polluters and the pollutees. 2 Professor Coase, in an article entitled The Problem of Social Cost (1960)3 asserted that in the absence of transaction costs, the opposed parties involved in an activity having “harmful effects” on each other may reach within the market an agreement that can lead to an efficient allocation regardless of the initial endowment of the property ...