The market does not incorporate the environmental costs of its operations (incurred during producing, consuming, and disposing of goods and services). It does not pay for the loss of ecosystem services such as watersheds, climate regulation, nutrient cycling and precipitation, and so the greater community must pay these “external costs.” Governments must require that industries pay the costs of protecting the environment from their activities. This has the added benefit of making products which are the result of environmental pollution or degradation more expensive than other products. This is called “internalizing” (here, environmental) costs.

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