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Academic Paper from the year 2017 in the subject Politics - Environmental Policy, grade: 1,0, Hertie School of Governance, course: Climate Policy, language: English, abstract: In economics, negative externalities are side-effects of economic activities. They arise somewhere during the lifecycle of products or services, are not considered by the market actors but have an influence on society's welfare. When the negative effects (social costs) that are not taken into account at the market exceed the private gain, the market outcome does not maximise society's welfare and thus externalities are one case of market failure.
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