Imagine you’re baking cookies and the oven sends smoke into your neighbour’s kitchen. You could be told exactly which fan to install—or you could pay a small fee every time you bake, so you naturally find the cheapest way to cut the smoke. That, in a nutshell, is the choice this chapter explores: do we clean up the environment with rigid rules or with flexible economic incentives? We’ll compare the two and see why the answer matters for both the air we breathe and the prices we pay.