Negative externalities refer to the unintended negative consequences or costs that affect individuals or organizations that are not directly involved in an activity or transaction. It occurs when the actions of one person or entity harm others or the environment, causing problems like pollution, traffic congestion, or health issues. These costs are external to or not accounted for in the decision-making process of the party causing the harm.
Full definition
Another example of
negative externalities in the stock market is when a leading company from an industry lists on the exchanges, which reduces the valuation premium that other listed companies from that industry enjoyed in the past.
These rules impose restrictions on how far the larger players in an economy, especially in manufacturing industry, are allowed to locate near centers of population, to pollute the ground or water or atmosphere, to contribute to global warming, and to
impose negative externalities on other players, individual or corporate.
Taken together with new evidence that after a period of adjustment, refugees have similar economic outcomes, across several dimensions, to comparison U.S. - born natives, and ultimately pay more in taxes than they receive in benefit, these findings indicate that the
potential negative externalities associated with refugee admissions are likely lower than some may worry.
Protected areas are not sufficient for nature conservation, especially for migratory species (e.g. birds) because surrounding habitats are agricultural lands which often
create negative externalities.
Industrial agriculture cranks out foods that have low sticker prices at the grocery store, but the production of these foods creates
huge negative externalities.
The optimal solution is to implement a global pigouvian tax on CO2 emissions (as well as other things like N20 and CH4 emissions) such that the level of tax is equal to the
net negative externality associated with emissions.
Or, if you'd prefer to bust out the fancypants economics jargon, agribusiness receives substantial direct and indirect subsidies, and is able to impose on society the cost of
significant negative externalities generated during production, enabling it to sell industrial foods well below the true cost of production.
Market and policy frameworks will also need to put other measures in place, such as long - term price signals to attract investment,
pricing negative externalities, and fostering a portfolio of dispatchable renewable technologies, such as hydropower and bioenergy.
In light of these findings, the researchers suggest that alternative retention measures should be used in addition to feed conversion ratios, as well as environmental footprint measures including resource use (e.g., land, water), greenhouse gas emissions and
negative externalities including biodiversity loss and water pollution.
Some government control and regulation is needed because of what economists
call negative externalities where they actually exist, but this should be undertaken only when problems are well defined, solutions are clear and carefully thought through, and based on sound science, and the economic benefits exceed the economic costs of government intervention.
In general, economists believe in the power of free markets and individual liberty, and, as such, are opposed to outlawing goods and services unless such a policy is justified based on costs to outside parties (
i.e. negative externalities).
cost / benefit analysis for all stakeholders — this evaluates the cost and benefits to stakeholders including customers, partners, suppliers, employees, the community, and the planet (particularly useful for
identifying negative externalities)
As indicated, banks may be competing for talent based on short - term performance, so there may be
negative externalities involved — in the sense that the long - term risk of certain types of behaviour may not be taken into account.
We argue that, if we accept that the influence of current tax and transfer considerations is sufficiently captured by the micro effect of relative income, macrolevels of inequality will matter to the rich — and only to the rich — because of
negative externality reasons.
Our third point proposes that this conditional effect of inequality can be explained by different microfactors and contends that the most important of these is concern for crime, as a most
visible negative externality of inequality.
The $ 480 billion ascribed to under - pricing is more solid than the estimate of implicit subsidies attributed to the exclusion, in energy prices, of
various negative externalities associated with energy production and utilization.
«Will Jerry Taylor speak truth to power by frontally questioning that carbon dioxide emissions is an
unambiguous negative externality — a global market failure — that government, every government, must address?
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Address Negative Externalities Why We Need to Reset Capitalism to Put the Environment at the Center
The emission of carbon dioxide and other greenhouse gases is a
classic negative externality — the «biggest market failure the world has ever seen,» in the words of Nicholas Stern, the author of a report on the subject for the British government.
But then of course, there are the reasons that we should have been taxing gas (and other fossil fuels) more all along, due to the
vast negative externalities they produce.
Within the transportation sector, the environmental damages per unit of fuel consumption are $ 3.80 (− 1.80 / +2.10) per gallon of gasoline using a 3 % discount rate, far larger than the current federal tax of $ 0.184 per gallon and more than 7x greater than the typical combined local, state and federal gasoline tax (
additional negative externalities associated with gasoline use should be part of an optimal fuel tax).
But while there is something ineffably twee about a retiree trying to show how they're hip and «down with the kids» thanks to their position in «big coin,» the fact that they are doing so raises very serious questions about bubble - driven risk (and
attendant negative externalities to society) which merits closer attention.