The program begins by explaining the economics of renewable and non-renewable natural resources. Next, the instruments to correct market failures are introduced, first the control and management solutions: Pigouvian taxes, subsidies and quality standards comparing them with taxes. Secondly, the market based instruments such as tradable pollution rights. Different concepts for the valuation of non-market amenities such as environmental quality are presented, including hedonic pricing, travel cost methods and contingent valuation. Their use is exemplified with an introduction to environmental cost- benefit analysis. Next, the techniques of valuation of the environmental impacts, the problems related to the regulation of transboundary pollution in the international treaties. Finally, the course touches upon the theory of optimal management of renewable and non-renewable resources.