Originally Answered: Need help! Econ/Env science question?
"Market failure is a concept within economic theory wherein the allocation of goods and services by a free market is not efficient. Market failure can be viewed as a scenario in which individuals' pursuit of self-interest leads to bad results for society as a whole.(source:Krugman, Paul, Wells, Robin, Economics, Worth Publishers, New York, (2006))
Private owners of forests would only be interested in developing and using the forests for their own self-interests. For example, they might cut down all the trees because they can get alot of money for the trees. And these owners would not consider the possible negative ramifications of their decision. For instance, cutting down all the trees might cause terrible erosion of the land where the trees were living.
In contrast, the Federal Government must act in the interest of all people in their country. They have to look at all the possible uses of the forest the trees are in, and based upon these uses, only allow those uses of the forest which are in the best interests of all users of the forest.The experts in the federal government would be interested in getting the most benefit from the forest for the population.Recreation use would only be permitted in terms of allowing the public to access areas of the forest in which the ecosystem would not be damaged.Timber harvest would only be allowed based upon quotas and
based upon the types of trees and quantity of these trees in the forest.Also, if timber were harvested,then reforestation strategies would have to exist to make sure the forest was preserved. The Federal Government would be interested in maintaining the state of animal life in the forest. Therefore unlike in a forest owned by private owners, in a forest owned by the Government, hunting would be regulated, and specific areas of the forest might be closed to allow the wildlife in the forest to exist in a balance.
Only certain animals would be allowed to be hunted at certain parts of the year, whereas in the private forest, the owner(s) of the forest could gain profit from allowing people to hunt on their property.In addition in a forest
.In regards to water supply, in the private forest, the owners could control how much water is accessible and also control who is allowed to access and use the water. They could also only permit certain types of uses for the water.These owners could charge users for using and accessing the water. In contrast the federal government would be interested in maintaining the access to the water for everyone who is interested in using the forest.The feds would determine which possible uses exist for the water, and then create or use exisiting government services to allow citizens to use the water in ways which have been found to be acceptable (based upon needs, and environmental concerns).