Notes: Internal v External costs

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Welcome!
Please get out your Cradle to
Cradle written answers for a stamp
AND your recycling notes from last
class.
Please read the board!
Let’s get sustainable!
Find that Cradle to Cradle reading and
answers.
Cross the room to find a partner!
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“Waste equals Food”
What was one of the ideas that stood out to
you in the reading?
 What is something you wonder about
having done the reading/something you
question?
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Reading p 109
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“Product of service”
Rewrite your answer to #3
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How is a “product of service” different
from our current system of product
ownership? Explain how this new
concept might benefit the environment.
Changing our mindset
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Cradle to grave vs.
cradle to cradle
What materials?
How produced?
How far did it travel?
How will it be used?
How will it be
disposed of?
Changing our mindset

Cradle to Cradle
 There is no waste in
nature
 All wastes become
an input for another
system
Interface carpet

Interfaceglobal.com
Some Environmental Economics
basics
Goal: To achieve sustainability (a
system which can continue indefinitely
because it doesn’t use up resources
faster than they are produced)
 A sustainable economy satisfies the
needs of people without depleting natural
capital, thereby protecting future
generations of humans and allowing
biodiversity to thrive.
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Going green to make green
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The new triple bottom line: profit,
society, environment
Full cost pricing:

Full cost pricing = internal costs + external costs
Internal costs – direct cost paid by
consumer
 External costs – (usually harmful) social
or environmental effect of production not
included in market price of good

Internal cost examples
External cost examples
Full cost pricing:

Full cost pricing = internal costs + external costs
Internal costs – direct cost paid by
consumer
 External costs – harmful social or
environmental effect of production not
included in market price of good

Encouraging full cost pricing
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Economic incentives
Subsidies for sustainable options
 Removing market barriers
 Ecolabeling programs
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Encouraging full cost pricing
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Economic disincentives
Green taxes/effluent fees
 User fees for public resources
 Pollution prevention or assurance bond
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Check for understanding
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What does sustainable mean relative to
manufacturing a product?
Consider the chair you are sitting on – name
one internal cost of production for the chair.
Name one external cost of production for the
chair.
What is meant by cradle to grave product
analysis?
How is “cradle to cradle” a new idea?
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