We discuss a model where the government is faced with a choice of an optimal policy mix of environmental standards and tariffs. We show that there are three possible combinations of optimal policy portfolio, namely positive tariffs and environmental standards, pollution subsidies and tariffs, import subsidies and positive environmental standards. Regardless of the types of policy portfolio, a stricter environmental standard can be sustained by a sufficiently large monopoly rent. We derive the subgame perfect benefit and cost policy rule and show there are multiple policy regions through the interplay of abatement technology, non-abatement technology, and public abatement parameters. Each policy region suggests whether the tariff benefits/costs dominate, or are dominated, by the environmental benefits/costs, i.e. which instrument is ultimately more effective for government rent-shifting purpose.