This textbook provides a concise introduction to micro- and macroeconomics and demonstrates how economic tools and approaches can be used to analyze environmental issues. Written in an accessible style without compromising depth of the analysis, central issues in the public policy debate on environmental problems and environmental policy are discussed and analyzed from an economics perspective. The book is meant as an introductory (and in some parts intermediate) text for undergraduate students in environmental sciences without a background in economics. It also serves as a companion for economists interested in a presentation of the micro and macro foundations of environmental economics, in a nutshell. The second edition has been revised, updated and extended in may ways, for instance by adding a microeconomic section on environmental technical change, a discussion of the significance of technical change for a sustainable development and a considerably extended macroeconomic section on economic growth.