This chapter explores how economics can be combined with forest ecology to assist in efficiently managing this important resource. Forests represent an example of a storable, renewable source. Typically, tree stands have three distinct growth phases—slow growth in volume in the early stage, followed by rapid growth in the middle years and slower growth as the stand reaches full maturity. The chapter also explores the efficient decision to cut a single stand or cluster of trees with a common age by superimposing economic considerations on a biological model of tree growth. Five schemes designed to internalize some of these transboundary benefits— debt– nature swaps, extractive reserves, royalty payments, forest certification, and conservation easements— have already begun to be implemented. The chapter examines the inefficiencies that have resulted or can be expected to result from both public and private management decisions, and also considers strategies for restoring efficiency.