Emissions taxes, tradeable emission permits and voluntary compliance policies are becoming the instruments of choice in controlling environmental problems at the national and international level. Careful design of these policies in second-best environments is a very important factor for their success. This book uses cutting-edge research in order to appraise their efficiency in varying market conditions. This book evaluates the impact that market power could have on the implementation of market-based environmental policies within static, dynamic and open economy frameworks. It explores the potential negative impacts that market-based instruments could have on competitiveness and examines the effects that time inconsistency in the implementation of emission taxes and emission permits could have on environmental innovation. Utilizing open economy frameworks, the contributors also analyse the impact of market imperfections on the structure of environmental polices across countries. They advocate co-operation across countries as a means to maximise the benefits from these policies. Environmental Regulation and Market Power will prove invaluable to scholars and policymakers in the area of environmental studies.