Heavy construction projects in cities entail two kinds of cost - internal cost, which can be defined in terms of payments from one set of parties to another, and external cost, which is the cost borne by the community at large as the result of disutilities entailed in construction and operation. Environmental trade-offs involve external costs, which are commonly difficult to measure. Cut-and-cover subway construction probably entails higher external and internal cost than deep tunnel construction in many urban geological environments, but uncertainty concerning the costs and environmental trade-offs of tunneling leads to limited and timid use of tunneling by American designers. Thus uncertainty becomes a major trade-off which works against tunneling. The reverse is true in Sweden after nearly 30 years of subway construction. Econometric methods for measuring external costs exist in principle, but are limited in application. Economic theory based on market pressure does not address the real problem of urban environmental trade-offs. Nevertheless, the problem of uncertainty can be addressed by comparative studies of estimated and as-built costs of cut-and-cover vs tunnel projects and a review of environmental issues associated with such construction. Such a study would benefit the underground construction industry and the design of transportation systems. It would also help solve an aspect of the urban problem. ?? 1978.