Despite decades of policy experimentation, the goal of effective environmental regulation has yet to be achieved. The failure of both government and market approaches has led to the introduction of new policy mechanisms, such as education, information-based strategies, economic instruments and self-regulation. Yet these policy instruments are usually treated as alternatives rather than as complementary. Drawing from studies in North America, Europe and Australia, the authors show how combinations of policy instruments, tailored to particular environmental goals, will produce more effective and efficient policy outcomes. They also examine how, at a time of fiscal constraint, environmental policy might still be designed in ways that improve outcomes both for the environment and for business.