Peer2Politics

Externality refers to what lies outside a given perimeter; in modern parlance, it often refers to a disconnected or unconsidered consequence, sometimes positive, sometimes not, of a particular action. For example, a factory is built in a municipality, enthusiastically welcomed by the residents, justified as stimulus for jobs, taxes, and a healthy community, which then, as a by-product of its manufacturing process, releases high quantities of mercury as waste into the nearby swamp or river which then descends through the towns below into the watershed and the ocean. That waste is toxic, and so it generates serious impacts along its downstream course, on the health of citizens below, on the continuum of terrestrial and riverine life, and ultimately on the marine food chain where it is ingested by fish, thereafter harvested and supplied to our table. All of that consequence, none of it monetized or factored into the cost of the factory or the price of its product, is called "externality."