This thesis presents three studies on the regulation of externalities. In the first chapter we use a two-period model to analyse the reform of environmental policy when enforcement is incomplete. We show that in evaluating such reforms it is important to differentiate between two types of non-compliers which react to regulatory reform in qualitatively distinct ways. In Chapter 2 we show the problems caused by using the 'ALARA' criterion when the supply of new technologies of environmental protection is endogenous. The difference between the ALARA rule and the socially optimal rule is characterised and it is shown that the difference depends upon whether the source of technical change is R&D effort or learning-by-doing. In the third chapter we examine the externalities which are created by a particular type of regulation, and show the gains from self-regulation which are thus generated. Though each chapter discusses a particular industry or class of industries, the results obtained are argued to have more general validity.

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