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In recent decades, a number of environmental policy makers have been moving away from “command-and-control” paradigms of regulation in favor of policies that operate by changing the incentives that people face when making decisions. In the traditional view, the job of the regulator was to tell people what to do and when in order to bring about desired environmental goals. But today, many regulators strive to avoid such rigid demands, instead seeking to build institutional structures in which individuals are encouraged to make better choices and to share the burden of environmental protection in socially beneficial ways. In this article, we will first review the development of ideas in the field of economics that define the role of incentives in green policy and then explore ...

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