Imperfect of information gmo labeling: public goods/bads. Maintains that rent seeking is the primary rationale for regulation. Imperfect link between parliament/regulator and the pollution generating activity. Principal agent problem -> moral hazard and conflict of interest: legislature does not necessarily act as an efficient benevolent maximize of social well-being. (endogamous polities) Basic regulatory instruments: prescriptive regulations/command and control regulation. Regulator specifies the steps for the individual polluters to take. Regulator collect the information necessary to decide the physical actions. Pollution control equipment requirement or specify an emission limit. Ontario"s drive clean program identifies vehicles that don"t meet provincial stds. Simplicity in regulating complex processes (flexibility in regulating complex environmental processes) Easy monitoring and compliance ( much greater certainty in how much pollution will result from regulations) Reduced incentives to find better ways to control pollution. Inefficiency pollution control are not equalized; difficulty in satisfying the equimarginal principle: economic incentives.