This article analyzes whether one should rely on the "ethics" of managers to strive for a clean environment or on the set of "incentives" that can be created. After studying the meaning of the socalled social responsibility of the firm, it shows that different perception of man explains the difference between economists and moral philosophers on the matter. It analyzes the misunderstanding with respec to cost-benefit analysis and with respect to the role of the market and the government in dealing with the subject. Then, the main types of environmental policies are evaluated with their impact on firms' behavior.
FOURÇANS, A. (2005). Firms and the Environment: Ethics or Incentives? In: Ethical Boundaries of Capitalism. 1st ed. Ashgate Publishing Limited, pp. 199-217.