Economic instruments (e.g. subsidies, taxes, etc) have been extensively used by policymakers as a mean towards environmental protection. Despite the fact that they are designed according to economic theory, its efficiency is questioned. Furthermore, evidence from social psychology indicate that social and personal conducts, like norms, are powerful motivators towards environmental protection. In light of these findings, the purpose of this dissertation is to provide a framework that takes into account psychological and social characteristics of an individual, leading to a more efficient environmental policy design.