Three systems of rights to natural resources are studied in Ch. 7: private, communal, and state. Institutional failures are shown to be the cause of inefficiencies and inequities, both in momentary allocations of resources and in the inter‐generational transfer of resources. It is argued that in the world we have come to know, there is a bias in the use of the natural environment, in that use at any moment is excessive, not insufficient. Since observed prices frequently do not reflect the social worth of natural resources, use should be made of notional prices, called accounting prices.