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The idea is to simulate the effects that industrialization had, and require you to either pay to keep pollution down (which is expensive and counter-productive to industry), or let it build up and eventually impact health and SoL of your pop groups living in the affected states.
There is no visible metric to it. Though like Grotacias said there's suppose to be a visual representation on the map. I have yet to see this, but you can get an idea of how polluted a state might be by looking at population size of it and how many industries are there (including mining and deforestation with lumber mills). You can visually see the impacts of deforestation on the map, which is a huge contributor to earning pollution quickly. The more leveled the industries are, the more pollution they will generate.