Economics and the environment. The economy-environment linkage. Environment and Development; Concepts of Sustainability. The Theory of Externalities and Market Failure (Public goods, externalities and Pigouvian taxes; property rights and Coase theorem). The Economics of Environmental Regulation (economywide effects of regulation, environmental regulation under uncertainty, markets for pollution control, tradable permits, non-point source pollution, monitoring and enforcement). Choice and comparison of policy instruments. Uncertainty and the choice of policy instruments (price or quantity controls?). Valuing the environment (CBA, cost-effectiveness, hedonic pricing, travel cost, contingent valuation). International environmental problems and economic solutions (acid rain, global warming, ozone depletion, etc). Time in economic analysis