Despite the positive role the industrial growth in the West Bank plays in the prosperity of the state; it has become a serious part of the environmental degradation problem in the country. Accordingly, there has become more attention towards finding economic and environmental solutions to the various industrial waste problems.

This research, presents a study on the possibility of internalizing environmental pollution in its various forms “solid, liquid, gas”, resulting from dairy products in Palestinian dairy factories. This, by applying the concept of including pollution price in the product price. The research studies the annual quantities of pollution resulting from the manufacture of dairy products in the factory, and estimates the costs of pollution resulting from manufacturing.

The research shows that internalizing environmental pollution is necessary and possible in principle. But, the possibility of fully applying it within the cost of the product requires a large increase in the value of production, of approximately 8.5%. The research also presents two questionnaires, one for industry owners, and one for policy makers and experts. It shows the weakness in the environmental monitoring process in the region, the different opinions about the possibility of applying the concept of including the pollution price in products price, and the incentives required from both parties.