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CHAPTER12Market Failures andBiotic ResourcesIn contrast to abiotic resources, biotic resources are renewable, if degradable,and are valuable as much for the services they provide as for anygoods that can be derived from them. In this chapter, we examine whetherspecific natural resources meet the criteria for market allocation, turningour attention to biotic stock-flow resources (ecosystem structure) and ecologicalfund-service resources (ecosystem function), paying special attentionto waste absorption capacity. However, we must never forget that theextraction of any part of an ecosystem and the emission of wastes affectvital ecosystem functions. Species interact with each other in unknownand unpredictable ways. Studying species, or other components of thesecomplex systems, can provide useful insights, but the integrated system isfar more than the sum of its parts. 1■ Renewable Resource Stocks and FlowsRenewable resource stocks and flows are rival and potentially excludable,depending on whether institutions exist that can regulate access to them. Ifdepleted at a rate no faster than they regenerate, they are nonrival betweengenerations. Unfortunately, unless we explicitly take future generations intoaccount, economic incentives are quite likely to lead us to deplete many ofthese resources faster than they can regenerate and may eventually threatenthem with extinction. What’s more, as we have pointed out repeatedly, theuse of renewable resource stocks and flows unavoidably depletes ecosystem1 Chapters 6 and 7 of the workbook focus on synthesis, the integration of the parts in order tobetter understand the whole.211