[rayiner]

That's certainly one aspect of it.

But you have to remember that the market will not factor in the value of externalities. If a wetland is providing $100m in water purification services to a community, the market won't price it at $100m, because the benefit is non-excludable. The price of the wetland ends up being the price of the only protectable property right (the right to exclusive possession) which is a small fraction of the net economic value of the land.

See: http://en.wikipedia.org/wiki/Externality

[warrenwilkinson]

True, but that value isn't for sale, it's manifest as easements owned by your neighbors. (the true price is buying the land and the easements that conflict with your agenda).

For example, if you fish the wetland, or set up a water front hotel, or drink the water then you have an easement right to clean water. It cuts both ways though; if a polluter moves to unoccupied land and pollutes 10 barrels a day, then he has an easement right to continue polluting at this rate.