Jump to ContentJump to Main Navigation
Endangered EconomiesHow the Neglect of Nature Threatens Our Prosperity$
Users without a subscription are not able to see the full content.

Geoffrey Heal

Print publication date: 2016

Print ISBN-13: 9780231180849

Published to Columbia Scholarship Online: January 2019

DOI: 10.7312/columbia/9780231180849.001.0001

Show Summary Details
Page of

PRINTED FROM COLUMBIA SCHOLARSHIP ONLINE (www.columbia.universitypressscholarship.com). (c) Copyright University of Minnesota Press, 2022. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in CUPSO for personal use.date: 28 June 2022

How to Deal with External Effects

How to Deal with External Effects

(p.43) 4 How to Deal with External Effects
Endangered Economies

Geoffrey Heal

Columbia University Press

The classical approach to external costs is to levy corrective taxes. An alternative, the cap and trade system, builds on the idea that external effects arise from inadequately-defined property rights. Historically most societies have regulated external effects, passing laws limiting externality-generating actions: this practice dates back at least to the Middle Ages. The US practices a legal approach to externality-management, giving damaged parties the right to sue for damages. Finally we are now seeing the emergence of an approach based on activism by civil society and consumers and by the investor community. Some of these approaches seem better than others – taxes and cap and trade, for example, are capable of correcting external effects at minimum cost.

Keywords:   external effects, taxes, cap and trade, regulation, activism, socially responsible investment, shopping your values, legal liability

Columbia Scholarship Online requires a subscription or purchase to access the full text of books within the service. Public users can however freely search the site and view the abstracts and keywords for each book and chapter.

Please, subscribe or login to access full text content.

If you think you should have access to this title, please contact your librarian.

To troubleshoot, please check our FAQs, and if you can't find the answer there, please contact us .