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Market failures can occur in the utilization of forest products when externalities are not accounted for in market prices. Specifically, timber exploitation may negatively impact downstream areas through soil erosion but these external costs are not reflected in market prices. Government failure can also take place if property rights to forest resources are not clearly defined and enforced, leading to overuse. Taxes and regulations are needed but must be carefully implemented to avoid unintended consequence

Author

putratidar

Language

EN