#This book is an important contribution to environmental economics and industrial organisation. It analyses environmental markets for green, i.e. environmentally friendly, products and economic policies that improve the functioning of these markets and environmental quality. The book combines rigorous, state-of-the-art theoretical economic analysis with well-founded and very accessible interpretations, even of complex results, and comes to policy conclusions that are highly relevant. I strongly recommend this book # not only to environmental economists, but also to general economists with an interest in markets for differentiated products.# # Michael Rauscher, University of Rostock, Germany #Eco-friendly# variants are rapidly gaining market share in many industries such as food, textiles, furniture, detergents and paints, automobiles, electrical appliances and domestic energy. These markets usually exhibit environmental differentiation, where consumers differ in their willingness to pay for the environmental attributes of a product. Building on the existing literature, this novel book provides a comprehensive analysis of firm strategy and environmental policy making in these types of #green# markets.