While the role of the state that is most crucial is its rule-making function, it has other powers that powerfully shape, and can potentially transform, markets. While certain corporate interests call passionately for the use of economic instruments like emissions trading to spearhead government sustainability initiatives, the state has long made use of economic instruments like subsidies and taxesbut in a tragically destructive way. For example, in Canada, tax rates for recycled material are on average 27 percent compared to 24 percent for virgin material, resulting in a $367 million disadvantage to the recycling industry (Gardner & Sampat, 1998, p. 31). This issue was raised in Chapter I Bad Rules and Wrong Signals when I discussed perverse subsidies and the use of the tax system to support extraction industry, suburban sprawl, fossil fuel use, and all manner of brown industry.