In this chapter, I use the Hotelling model to discuss environmental questions. First, I consider a model where a firm produces an environmentally friendly product, while the rival does not. The consumers are heterogeneous: some of them evaluate more the green product, while the others are indifferent. I show that the government can use taxation to stimulate the diffusion of the green product. Second, I consider a model where firms cannot locate in some zones of the linear city (“zoning regulation”). I derive the equilibrium locations and prices, and I discuss the implications of zoning on welfare.