This chapter describes the history and status of externality research at Ontario Hydro prior to 1993, and explains Ontario Hydro's approach to quantifying and monetising externalities. It also describes the context for Full-Cost Accounting (FCA) as a key component of Ontario Hydro's commitment to sustainable development. Ontario Hydro sees FCA as providing information necessary but not sufficient for decision-making. It uses full-cost information as an input to its decision-making, not as the sole basis for making decisions. Ontario Hydro is investigating methods to obtain more precise information on its internal environmental expenditures at the project/process level, to track and allocate these expenses on a life-cycle basis, and to accomplish this more explicitly than in the past. Ontario Hydro supports the damage function approach to quantifying and monetising externalities and has used this approach since 1974. The sustainable energy development concept applies the principles of sustainable development to the energy sector.