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The paper examines the relationship between environmental policy and employment. It argues that environmental policy probably has a positive effect on employment. To support this conclusion the following arguments will be made: polluting companies, and hence employment in these companies, can be, but is not always, negatively affected by environmental policy; polluting companies do not move to another country due to environmental policy; the ecosector is an important employment sector; and, the net balance between job losses and gains due to environmental policy is positive. This conclusion is conditional on certain assumptions concerning the functioning of labour markets, the improvement in environmental quality and the normative implications of the debate.