The externalities The measurement of the externalities is essential in order to set up a consistent cost-benefit analysis (CBA)
The existence of high and diffused externalities such as those connected to environmental impacts is an obstacle for market prices in reaching a fair equilibrium between offer and demand
Public policies should target external costs reductions through environmental cost effective regulation and a fair charging policy based on the “polluter pays” principle
It’s much more better to estimate external costs rather than to ignore their existence

© 2006 - Andrea Molocchi