As the price for the resource increases, more is extracted now, leaving less for the future. As more is extracted, the supply for the future shifts up, because costs increase as producers must extract resources from less and less accessible places. Since the price of the resource will likely be higher in the future, the resource owner must decide whether to extract the resource today or save it for the future. The supply and demand for nonrenewable resources limit the rate at which the nonrenewable resources are consumed. The role of the market for renewable resources is to determine a price at which the quantity of the resource used is just sufficient to enable the resource to renew itself at a rate that best satisfies society's wants.
Market failure is the failure of the market system to make economically efficient decisions.
In the real world, resource markets sometimes fail to produce the economically efficient output or fail to allocate resources efficiently because of externalities and poorly defined property rights. The lack of property rights is a major problem in global environmental problems. Nobody owns the air that blows from the United States into Canada. If U.S. power plant emissions cause acid rain in Canada, there is no market or government mechanism that allows the Canadians to restrict the behavior of U.S. firms, unless the Canadian government can convince the U.S. government to intervene. Solving global pollution problems requires governments to cooperate, sometimes in ways that aren't beneficial to their own interests.