This project analyzes how a principal can motivate an agent to conserve rather than exploit a depletable resource. This dynamic problem is relevant for tropical deforestation as well as for other environmental problems. It is shown that the smaller is the agent's discount factor (e.g., because...

Environmental matters are at the heart of European Union policy, and are also firmly entrenched in the Constitutions of several Member States. In this context, legal instruments, including tax legislation (tax incentives), have become a tool used to foster the protection of the environment....