How can policy-makers pursue environmental goals while simultaneously keeping the burdens on industry to a minimum? Why does innovation play the key role in this balancing act, and what are the implications for the development of sustainable industrial societies? This book examines the evolution of environmental policy in 6 OECD countries. Through numerous examples, it contrasts the widely-varying political and regulatory styles and their consequences for innovation. Two industry-specific case studies provide a transnational perspective on the co-evolution of technology and environmental policy. The book concludes that innovation can be successfully harnessed by setting credible, long-term environmental goals and ensuring that regulatory instruments are grounded in flexibility, dialogue and trust.