Comparing the cost effectiveness of market-based policy instruments versus regulation: the case of emission trading in an integrated steel plant in India We thank Katrin Millock, Kanchan Chopra and Jeffrey Vincent for their valuable comments and suggestions on earlier version of this paper. We also thank to participants at the Second International Conference on Environment and Development, The Royal Swedish Academy of Sciences, Stockholm, 68 September 2000, where this paper was presented. The paper has benefited greatly from the comments made by the editor, Charles Perrings, and three anonymous referees.