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Externalities: Difference between revisions
→For Externality Minimisation (FEM)
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Quantifying externalities is very difficult as many externalities are quantitative. For instance strip mining a coal field would ruin a beautiful view of nature which would last for as long as humans are alive, so would this not be priceless? A better thought experiment is the humble cup of coffee. | Quantifying externalities is very difficult as many externalities are quantitative. For instance strip mining a coal field would ruin a beautiful view of nature which would last for as long as humans are alive, so would this not be priceless? A better thought experiment is the humble cup of coffee. | ||
=== The Cup of Coffee === | ==== The Cup of Coffee ==== | ||
The humble cup of coffee is a brilliant example as to the issues in business associated with externality minimisation. First we should set the scene and ask: ''What would be the most ethical (including environmentally friendly') way to serve someone coffee in a cafe?'' | The humble cup of coffee is a brilliant example as to the issues in business associated with externality minimisation. First we should set the scene and ask: ''What would be the most ethical (including environmentally friendly') way to serve someone coffee in a cafe?'' | ||
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A company which is most ethical would want to have the highest addition of points. However, there is often a direct correlation as to the higher amount of points the more costly the solution, i.e. organic will always cost more the non-organic just on the principle that it is more niche. | A company which is most ethical would want to have the highest addition of points. However, there is often a direct correlation as to the higher amount of points the more costly the solution, i.e. organic will always cost more the non-organic just on the principle that it is more niche. | ||
== For Externality Minimisation (FEM) == | === For Externality Minimisation (FEM) === | ||
Any business before inception should figure out its entire externality and profits should be primarily routed to externality minimisation before anything else. This type of business is called a For Externality Minimisation (FEM) business and is one of the forming principles of the '''[[tenet]].''' | Any business before inception should figure out its entire externality and profits should be primarily routed to externality minimisation before anything else. This type of business is called a For Externality Minimisation (FEM) business and is one of the forming principles of the '''[[tenet]].''' | ||