It has recently been claimed that, contrary totraditional neoclassical theory, suitably chosenenvironmental regulation is often beneficial for theregulated firms because it induces cost-reducinginnovations. I analyze the extent to which thisposition is compatible with microeconomic analysis....

We analyze the factors that influence the support for environmental policy proposals. Swiss referendum data show that proposals obtain more yes-votes if they do not restrict consumption possibilities directly, if they are endorsed by the largest business association, if environmental preferences...

In this paper, a model of environmental regulation with imperfect monitoring of emissions is presented. The regulator can use linear output taxes and emission taxes to influence the pollution level of a risk-averse firm. In contrast to the perfect monitoring case, a tax mix will usually be...