Difference between revisions of "External cost"
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'''External costs''' are costs that are not included in the price of a product but still cause negative (or sometimes positive) impacts to the society or stakeholders. The market theory says that if external costs cannot be included in prices e.g. using taxation, the market process will lead to outcomes that deviate from the societal optimum. | '''External costs''' are costs that are not included in the price of a product but still cause negative (or sometimes positive) impacts to the society or stakeholders. The market theory says that if external costs cannot be included in prices e.g. using taxation, the market process will lead to outcomes that deviate from the societal optimum. | ||
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Revision as of 05:34, 8 November 2015
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External costs are costs that are not included in the price of a product but still cause negative (or sometimes positive) impacts to the society or stakeholders. The market theory says that if external costs cannot be included in prices e.g. using taxation, the market process will lead to outcomes that deviate from the societal optimum.
Question
What are important external costs in environmental health?
Answer
Health impacts and climate impacts are often not considered in pricing, so they remain as external costs.
Rationale
| Obs | Cost | Result | Description |
|---|---|---|---|
| 1 | Health | 50000-150000 | Euros lost per DALY (disability-adjusted life year) |
| 2 | Climate | 15-75 | Euros lost per ton of CO2(equivalent) emitted |
Numbers are rough estimates based on typical health impact assessments and common target prices of carbon trade.
See also
References
