This dissertation focuses on two independent areas: the analysis of biofuel and related energy policies, and the relationship between trade and the environment with heterogeneous firms. Chapter 1 provides quantitative estimates of the welfare benefits of U.S. biofuel and related energy polices. The remaining two chapters investigate the firm-level relationship between trade and the environment using theoretical model and empirical evidence. Chapter 2, theoretical in nature, explores the impact of the stringency of environmental policy and exposure to trade on the induced clean technology adoption and on firm dynamics. Using a unique detailed facility-level dataset containing criteria air emissions and economic activity data, chapter 3 investigates whether exporters are more environmentally friendly than non-exporters in terms of lower emissions per value of sales.