This paper distinguishes between two types of ethical Problems. A Type I ethical problem is one in which there is no consensus as to what is ethical. A Type II ethical problem is one in which there is a consensus as to what is ethical, but incentives exist for individuals to behave unethically. This paper shows that Type I ethical problems can only be resolved by making, challenging and reasoning through moral arguments, and Type II ethical problems can only be resolved by changing the institutional environment so that people do not have incentives to behave Unethically. Applications to and examples from agricultural and environmental problems are provided.