Why are they so Important

The high external costs of a social system are not only the symptoms of serious environmental problems, but also of economic and social justice ones:
  • non-measured external costs “overheat” the environmental conflict (Not In My BackYard syndrome). Decision making processes could and should be supported by external costs valuation, either in the environmental impacts mitigation stage and in the compensation final stage;
  • they alter competition rules, by favouring technological development along harmful paths (for example this is the risk for the diffusion of diesel more efficient but not less harmful engines, or for non controlled biomass energy conversion technologies)
  • they alter the public resources allocation, by subtracting resources from more efficient uses (typically health system expenses reduce education and R&D ones)
  • they reduce the efficiency and social productivity of labour, one of the main factor of a country development

The external costs: a problem of fairness,
of justice and of social welfare.




The external costs may vary a lot between different States, or Regions or even Cities, acting as ballasts on their growth efforts. Correcting the distortions that generate the external costs is a condition for a sustainable development.

© 2006 - Andrea Molocchi