This completely revised and updated edition covers all the major topics in the field, including the economics of sustainable development, market failure and mechanism design, pollution taxes and tradable permits, trans-boundary pollution, non-renewable and renewable resources (including both fisheries and forests), environmental valuation, risk, and trade and the environment. The authors make extensive use of mathematical models, supplementing these with careful explanation and graphical analysis. Emphasis is placed on the application of economic analysis to real-world environmental problem solving, such as designing policies to control pollution or to reduce global biodiversity loss, and examples are drawn from all over the world.