Theory predicts that incentive-based regulatory instruments reduce compliance costs by encouraging efficient resource allocation and innovation in environmental technology. Cost reductions from pollution permit trading often have exceeded expectations, but the devil is in the details: the rules...

Compensation for natural resources damage may be provided, in principle, by a payment equal to the value of damage, a compensating restoration project, or partial restoration plus a compensating payment. Applicable laws have a pronounced tilt toward restoration. When determining the value of...