This course provides an introduction to the principles of environmental economics. 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. The course begins by examining how economic incentives lead to environmental problems and discussing various options for dealing with these problems. Because economic analysis requires information on both costs and benefits, we next discuss methods for valuing the benefits of environmental amenities. The course continues with applications to various policy issues.