I like the ideas that are coming up here about how the global ecology and stuff. I liked SMAC's way of how ecology was handled, and how to balance economy with ecology. I would like it if CIV III had something similar to SMAC's way and have social engineering and more city improvements to deal with enviornmental stuff. Ancient and Middle Ages era don't really need to deal with pollution/enviornmental degragation but starting with Industrial you will have to start planning out what to do.
In America, England the pollution while it seemed bad with smog is not much comapred to what it was now. At that time they didn't "overdevelop" the land and most was still wilderness. However, starting in the 1940s after WWII, America went into super capitalist mode and we get "suburban sprawl" which led to LOTS oh highways and roads (rails actually produce less, but are but ugly when the whole landscape covers them in CIV III
and people starting moving away from the city. As a result, if people stayed centralized near cities rather than become suburbanized, their would have been alot less pollution and less overdevelopment because less people would use cars and we would have to cut down trees and develop into wildlife areas nearly as much. Also the city center loses vital economic income. Suburbanization also increases the cost of taxes because to develop new (ewww ugly) highways, pipelines, social services, etc over a greater area. But that is only one problem of ecological destruction that has claimed alot of wildlife land and maybe IS more of a big problem than factories today. The bad thing is we can't deconstuct housind developement or highways (America uses too many cars hence the oil problem in the Middle East).
The point of the above is, if people would have stayed centralized in the city, without developing so many housing projects and highways, we wouldn't have had nearly the ecological problems in America we have today.
One bad offset of having too much roads/irrigation/mines/RR should be 1) pollution (about 70% I believe of America's pollution is from car exhaustion, while about 30% is from factories) and 2) the possibility of people getting uphappy from pollution (I heard in America thousands die a year related to car pollution) amd 3) Pollution should HAMPER culture production in the city depending on how bad you pollute/overdevelop your enviornment.
In real life Jungles and stuff are important, besides there are many people who live with in the rain forest or close by and they aren't that bad. Those tribes or people who live by them somehow deal with things like malaria and stuff like that.
As for the luxuries/SR, that is a good idea that it should disappear. It should warn you first though if you decide to deforest it.