What Externalities?

By Webster, Ken | Teaching Business & Economics, Spring 2003 | Go to article overview

What Externalities?


Webster, Ken, Teaching Business & Economics


As an economics teacher turned educator with a strong commitment to an ecologically sustainable future it has always been a puzzle to me that we insist on talking about 'externalities' - whether positive or negative.

External to what, exactly? Of course it might appear to be a matter of abstraction, a useful tool. But as these practical examples suggest, some of our useful tools may be inappropriate within a different set of assumptions about how the world works.

The context is familiar excess carbon dioxide emissions from the burning of fossil fuels.

The steps below show how you might introduce this context and develop discussion. The briefing sheet can be photocopied for students.

STEP 1

Ask students to read Briefing 1, then investigate the Climate Care web site.

STEP 2

Discussion might centre on how effective students feel this scheme might be in reducing carbon dioxide emissions. Would they themselves sign up? Or should schools? Is this likely to be a popular scheme? Might the scheme encourage citizens to pay and forget - their conscience salved?

STEP 3

Briefing 2 leads students to the Future Forests web site. Having looked at it, students can consider how the costs and benefits of Climate Care might compare with Future Forests, or other alternatives such as:

a) compulsory charging to internalise these costs within the price of the fuels;

b) doing nothing, as the figures in Climate Care and Future Forests are just estimates and the science of storing carbon in trees is undeveloped and controversial;

c) leaving it to governments to regulate emissions as in the Kyoto protocol.

STEP 4

Now ask students to consider a USA scheme for carbon sequestration. It has new features. The information is in Briefing 3. Encourage discussion and introduce the following ideas as appropriate.

The USA is one of the leading producers of carbon dioxide emissions and it has not ratified the Kyoto agreement, but this proposal seems to offer a cheap offset option. The trouble is that there are scientific arguments against it. In the Observer article on which Briefing 3 is based, Prof Andrew Watson of East Anglia University is quoted saying:

'It is not just that this project may be dangerous; it is also unethical. What right has one group or country to use the world's oceans to resolve its domestic problems?'

Two key issues arise. First, if the ecosphere is a complex, iterative and pretty open system in which human kind participates and within which we do not control even a fraction of the possible variables, it surely follows that certain choices are ruled out in principle, that principle being the precautionary principle.

Under this principle, the onus of proof has to be on those who propose changes that appear to put at risk the integrity of the whole system. The onus does not lie on those systems 'external' to private decision making to prove that there is a problem, for once the problems are known and their significance established the situation may already be irreversible.

Secondly, if another principle were to be added - that of extended producer responsibility [EPR] - the firm would not be making arbitrary decisions about materials and waste. It would accept that ecological design and EPR (including take back for 'end of life' items) made a nonsense of terms such as 'externalities' because systemically designing out waste, making all of it internal, is the more efficient approach overall as it transfers fewer costs to another part of the system. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

What Externalities?
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.