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.

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. The code below is used to fetch the variable for models.

+ Show code- Hide code ## This is code Op_en7379/ on page [[External cost]] library(OpasnetUtils) objects.latest("Op_en7379", code_name = "externalities") # [[External cost]] ovariables DALYprice, co2price cat("Price of a DALY (€)\n") oprint(summary(EvalOutput(DALYprice))) cat("Price of a ton of CO2 (€)\n") oprint(summary(EvalOutput(co2price)))

Rationale

External costs in environmental health(€/DALY,€/ton)

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.

+ Show code- Hide code # This code is Op_en7379/externalities [[External cost]] library(OpasnetUtils) DALYprice <- Ovariable("DALYprice", ddata = "Op_en7379", subset = "External costs in environmental health") DALYprice@data <- DALYprice@data[DALYprice@data$Cost == "Health" , ] co2price <- Ovariable("co2price", ddata = "Op_en7379", subset = "External costs in environmental health") co2price@data <- co2price@data[co2price@data$Cost == "Climate" , ] objects.store(DALYprice, co2price) cat("Objects DALYprice, co2price stored.\n")