Public goods are those goods and services whose consumption is characterized by non-rivalry and non-excludability, meaning that one person’s use of the good does not reduce its availability to others, and it is either impossible or highly costly to exclude individuals from using it. These properties distinguish public goods from private goods and create unique challenges for their provision in a market economy. Classic examples include national defense, clean air, public parks, street lighting, and lighthouse services. In environmental economics, many environmental resources such as biodiversity, climate stability, and air quality exhibit public good characteristics, which leads to issues like free riding and under-provision. Non-rivalry implies that the marginal cost of providing the good to an additional individual is zero or close to zero. For instance, once a streetlight is installed, illuminating one more person does not diminish the light available to others. Similarly, the benefits of national defense are shared by all citizens simultaneously without reducing the level of protection available to any individual. Non-excludability means that it is difficult or impossible to prevent individuals from enjoying the benefits of the good once it is provided. For example, once clean air is available, it is not feasible to exclude anyone from breathing it, regardless of whether they have contributed to its preservation. Another important feature of public goods is the free rider problem. Since individuals cannot be excluded from consumption, they have an incentive to understate their true willingness to pay and rely on others to bear the cost of provision. This leads to a situation where the good may be underprovided or not provided at all by the private market. For example, in the case of climate change mitigation, each country may prefer that others reduce emissions while benefiting from the resulting environmental improvements, leading to collective action problems. Public goods also exhibit indivisibility, meaning they are often provided in large, discrete units rather than small, divisible quantities. A lighthouse cannot be partially built for a subset of users; it must be constructed fully to serve its purpose. Similarly, national defense cannot be tailored to individual consumers but is provided uniformly across the population. This further complicates efficient allocation through market mechanisms. In contrast, private goods are both rival and excludable. Consumption by one individual reduces the amount available for others, and it is possible to prevent non-payers from consuming the good. Examples include food, clothing, and personal electronic devices. Markets can efficiently allocate private goods through the price mechanism, as consumers reveal their preferences through their willingness to pay, and producers adjust supply accordingly. The efficient provision of public goods differs fundamentally from that of private goods due to these characteristics. For private