FIGURE 1 Growth in the Number of U.S. Environmental Laws. SOURCE: Balzhiser, 1989.

of $51 million) by taking approaches different than those required by the regulations (Schmitt et al., 1993; Solomon, 1993). The potentially stifling effect of regulation on innovation can be avoided by setting performance standards that companies may meet in whatever creative manner they devise.

More recently, incentives have been added to the ''toolset" used to improve environmental quality. In a shift from its traditional enforcement programs, the



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