Groups that promote “free-market” solutions to environmental problems were once thought of as loonies, even by some officials in the Reagan administration. No more. Ideas developed by groups such as the Political Economy Research Center in Bozeman, Mont., and the Reason Center in Los Angeles are now held dear by the Bush administration. The groups contend that market incentives, instead of government regulations, are the most effective way to protect the environment. But many mainstream environmental groups say so-called free-market environmentalists often put the market ahead of protecting the environment.

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