This project will investigate the following issues relevant to enforcement of environmental laws and compliance with pollution standards: (1) the extent of internalization of emission costs that could be expected in the absence of governmental regulations, (2) whether penalty levels based on recapturing the benefits from noncompliance are sufficient for reducing emissions, (3) the extent to which compliance rates will decrease when sporadic as opposed to frequent monitoring is utilized, (4) the effect on emissions levels of increasing the emission standard, (5) the responsiveness of compliance levels to increases in penalties, (6) the effects of stochastic monitoring and input on compliance rates, (7) the relative effectiveness of threat and benefit messages in enhancing compliance. and (8) the internalization rates in highly competitive environments. A series of laboratory experiments, which permit control that field studies do not, will be utilized to address these issues. In a modified public goods setting, individuals will decide the percentage of emission costs to internalize with the remainder of the costs being passed on to the group. The key to this environment is that although there is an incentive for each individual to pass the costs on to the group, there is a cooperative solution that is pareto optimal in which members internalize all costs of emissions. Using this basic framework, an emissions standard will be implemented under a variety of different conditions. Such studies should help establish a uniform code by which the State agencies that now enforce and monitor environmental laws can develop in order to establish consistency in enforcement.