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Environmental Economics pp 77–101Cite as

The Internalization of External Effects

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Part of the book series: Springer Texts in Business and Economics ((STBE))

Abstract

Environmental or external effects are not sufficiently integrated into the market system, leading therefore to “market failure” in the sense of an inefficient market equilibrium. The “internalization” of external effects intends to restore efficiency and reestablish optimality of the equilibrium allocation. As external effects signal missing markets, the main idea to be investigated in this chapter is the assigning of “property rights” for the environmental commodities in question or the immediate establishing of “artificial” markets, thereby “completing” the market system. The various tools to achieve this task are formally related.

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References

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Author information

Authors and Affiliations

  1. Faculty of Business and Economics, TU Dresden, 01062, Dresden, Germany

    Prof. Dr. Hans Wiesmeth (Chair of Economics, esp. Allocation Theory)

Authors
  1. Prof. Dr. Hans Wiesmeth
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Correspondence to Hans Wiesmeth .

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© 2012 Springer-Verlag Berlin Heidelberg

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Cite this chapter

Wiesmeth, H. (2012). The Internalization of External Effects. In: Environmental Economics. Springer Texts in Business and Economics. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-24514-5_6

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  • DOI: https://doi.org/10.1007/978-3-642-24514-5_6

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  • Publisher Name: Springer, Berlin, Heidelberg

  • Print ISBN: 978-3-642-24513-8

  • Online ISBN: 978-3-642-24514-5

  • eBook Packages: Business and EconomicsEconomics and Finance (R0)

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