This textbook systematically describes the functioning of markets, market imbalances, market failures, allocation policy, and overall welfare, explaining them in their contexts. After presenting the theory of the market and market equilibrium, the causes and consequences of market failure are analyzed. Subsequently, the roles and possibilities of allocation policy within the framework of economic policy are examined. Building on this, the general tools of competition policy are described and discussed in terms of their suitability. In the specific analysis, the objectives and instruments of environmental economics as part of economic policy are investigated. The focus is not on evaluating state activity, but rather on assessing the environmental policy instruments based on the criteria of efficiency, goal achievement, and political feasibility.