Comprehension: For environmental assets, markets can fail if prices do not communicate society's desires and constraints accurately. Habitat destruction and loss of biodiversity originate in several sources of market failure: public ownership of large open-access land with limited government capacity encourages over-exploitation of wildlife, timber, grazing and crop lands. Lack of secure land tenure gives little incentive to conserve habitat. Biodiversity is a case of non-rivalry and non-excludability and has no price, so such failures are linked to incomplete markets; they can also arise from externality if an outside agent disturbs the ecosystem. This can end the ecosystem unless local people act collectively.
The concept of the 'Tragedy of Commons' was founded by:
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