While sand has become a scarce essential resource for construction and land reclamation worldwide, its extraction causes severe ecological damage and high social costs. To derive policy solutions to this paramount global challenge with broad applicability, this model-based analysis exemplarily studies sand trade from Southeast Asia to Singapore. Accordingly, a coordinated transboundary sand output tax reduces sand mining to a large extent, while the economic costs are small for the sand importer and slightly positive for the exporters. As a novel policy implementation approach, a “Sand Extraction Allowances Trading Scheme” is proposed, which helps sustainably balance the importer’s economic growth with the exporters’ economic development. Copyright: © 2021 Hübler, Pothen. This is an open access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited.