The ambient permit system proposed in the literature for cost-effective pollution reduction is difficult to implement and may result in lower net benefits than using another instrument. The article develops a model for comparing the environmental net benefits of three policy instruments for...

Recommended readings (Machine generated): Roland Bénabou and Jean Tirole (2003), 'Intrinsic and Extrinsic Motivation', Review of Economic Studies, 70 (3), July, 489-520 -- Kjell Arne Brekke, Snorre Kverndokk and Karine Nyborg (2003), 'An Economic Model of Moral Motivation', Journal of Public...

1. Background and overview -- Part 1: The need for environmental and natural resource policy -- 2. Causes of environmental degradation -- 3. The evolution of rights -- Part 2: Review of policy instruments -- 4. Direct regulation of the environment -- 5. Taxes -- 6. Tradable permits -- 7....