There is no doubt that environmental economics has greatly progressed since the appearance of the second edition of this book in 2000. In fact, it is these advances that persuaded me to thoroughly revise the text and extend it considerably. However, it is not necessary to establish whether environmental economics progressed in the manner cited previously or quite differently, nor do we need to go into the variances between the previous edition and this one in detail. For most readers of this book, the developments that led to the present state are not terribly important. (This is particularly so because the second edition is written in German.) Let us instead take this book as it is.

I investigate environmental pollution and environmental policy using the methods of microeconomics. The aim is to work out the economic structure that underlies the manifold practical problems and the attempts at solving them. Special attention goes to the incentive structure to which those making decisions of relevance to the environment are exposed because of market mechanisms, state regulation, and international institutions.