I.You have to distinguish three kinds of pollution:
a) Population pollution
b) Building pollution
c) Other forms of pollution (volcanoes, nuclear waste)
II. The flags in the editor:
The editor flag "remove population pollution" (like you have it with the improvement "mass transit") reduces population pollution to a maximum of 1.
The editor flag "Reduces building pollution" (like you have it with the improvement "recycling plant") reduces the building pollution to a maximum of 1.
III. Methodes to set these pollutions to zero:
1.
The population pollution:
This pollution is connected to the city size levels in the "general settings" registry of the editor. It starts, when you have a "level-3 city". So with "level one-cities" (in the unmodded Civ 3 games up to size 6) or "level two-cities" (in the unmodded Civ 3 games up to size 12) you don´t have any population pollution.
With "level- 3 cities" (in the unmodded Civ 3 games size 13 or more) the population pollution starts. So the methode against population pollution is, to not allow level 3 cities in the editor. You can do this with several methodes:
a) In the general settings you can set the maximum size for a "level 2 city" to up to 1000. In practice you will not reach the "level 3 size".
b) You can set the maximum city size for a "level-two city"in the general settings to a lower size (there are some modders who say a city size of 24 is good for reasons of gameplay) and don´t allow any improvement to get the level 3 size (in the unmodded Civ 3 games the improvement "Hospital" and the GW "Shakespeare's Theater").
2.
The Building pollution:
You can give the buildings a negative level of building pollution. But remember, that this only reduces the building pollution (to a minimum level of 0). It does not reduce the population pollution.
3.
The other forms of pollution (volcanoes, nuclear waste):
Don´t use volcanoes, give the nukes another setting to work and don´t allow nuclear plants to melt down.
Links:
http://forums.civfanatics.com/showthread.php?s=&threadid=52360 (post 5)
http://forums.civfanatics.com/showthread.php?t=91033