Environmental Impacts and Costs of Energy

Air pollution causes considerable damage to human health, ¡ora and fauna, and materials. The damage costs are external costs, to the extent that they are not included in the prices of goods, that is, they are external to the market. The external costs can be internalized via taxes, tradable permits, or other environmental regulations. Here we use the term damage costs,to avoid possible ambiguities about the extent to which the damage costs are already internalized.