A survey of the environmental and natural resource economics literature finds few references to property rights and transaction costs. The Journal of Economic Literature, for example, has no recent articles on natural resources or the environment containing the phrase “transaction costs,” “property rights,” or “Coase” in the title or abstract. When the search of the journal was expanded to these words appearing anywhere in the article, only one paper was found and it was about resource management without markets.

The environmental and natural resource literature instead focuses on problems of market failure in the tradition of A. C. Pigou. Accordingly, natural resources and environmental goods are either overexploited as a result of the tragedy of the commons – for example, fisheries – or underproduced as a result of the free-rider problem – for example, species habitat. In either case, market failure is the issue and governmental intervention is warranted.