This course provides an introduction into the principles of environmental economics, with a focus on policy applications. The principal problem in any economics course is how to best allocate scarce resources. This holds true for environmental economics as well. However, environmental resources differ from other goods that economists study in that there is usually no market for them. Thus, government policies are needed to maintain and improve environmental quality. Similar considerations will be made for natural resources, both exhaustible and renewable, where policies are needed to determine the optimal rate of exploitation.