This paper provides an overview of the U.S. experience with market-based instruments with four categories: emission charges, tradeable permit systems,market friction reduction, and government subsidy reduction. Following that, I examine normative lessons that can be learned from these...

Environmental policies typically combine the identification of a goal with some means to achieve that goal. This chapter for the forthcoming Handbook of Environmental Economics focuses exclusively on the second component, the means - the "instruments" - of environmental policy, and considers, in...