This module examines the interactions between the economy and the environment and provides an introduction to environmental economics. The module is split into four sections. The first introduces the topic and examines the fundamental ways in which the economy and the environment interact. The second section focuses on policies to prevent environmental degradation including pollution taxes and tradeable permits. Section three examines how and why economists value people’s preferences for the environment. Finally, section four applies economic analysis to a number of global environmental issues including climate change and deforestation.