One of the recent developments in comprehending the effects and complexities of environmental regulations are by building environmental models. These models play various functional roles in environmental regulations ranging from assisting in policy making, in formulating new laws and resolving legal disputes to being used as a tool for collaborative negotiations between multiple set of parties. One such methodology for developing models in the context of environmental regulations is the economic analysis of law (EAL). This paper looks into how the EAL could be used in formulating environmental regulation models. This paper is an attempt to help policy makers, lawyers and environmental professionals, in general to understand how EAL could be used as an empirical tool to identify how regulatory quality could reduce pollution levels successfully and also how other variables (such as public participation, Ngo′s etc) could help reinforce the existing regulatory quality. In addition, to understand how this methodology can aid in devising models for examining the effectiveness of the regulatory quality, it also looks at EAL′s historical origins and how it has developed over time and its use (both advantages and disadvantages) in understanding regulation.