Editing Externality (section)

===Solutions to greenhouse gas emission externalities===
The negative effect of carbon emissions and other [[greenhouse gas]]es produced in production exacerbate the numerous environmental and human impacts of anthropogenic climate change. These negative effects are not reflected in the cost of producing, nor in the market price of the final goods. There are many public and private solutions proposed to combat this externality

====Emissions fee====
An emissions fee, or [[carbon tax]], is a tax levied on each unit of pollution produced in the production of a good or service. The tax incentivised producers to either lower their production levels or to undertake abatement activities that reduce emissions by switching to cleaner technology or inputs.<ref>{{Cite web | url=https://www.c2es.org/content/carbon-tax-basics/ |title = Carbon Tax Basics|date = 20 October 2017}}</ref>

====Cap-and-trade systems====
The cap-and-trade system enables the efficient level of pollution (determined by the government) to be achieved by setting a total quantity of emissions and issuing tradable permits to polluting firms, allowing them to pollute a certain share of the permissible level. Permits will be traded from firms that have low abatement costs to firms with higher abatement costs and therefore the system is both cost-effective and cost-efficient. The cap and trade system has some practical advantages over an emissions fee such as the fact that:
1. it reduces uncertainty about the ultimate pollution level. 
2. If firms are profit maximizing, they will utilize cost-minimizing technology to attain the standard which is efficient for individual firms and provides incentives to the research and development market to innovate. 
3. The market price of pollution rights would keep pace with the price level while the economy experiences inflation.

The emissions fee and cap and trade systems are both incentive-based approaches to solving a negative externality problem.

====Command-and-control regulations====
Command-and-control regulations act as an alternative to the incentive-based approach. They require a set quantity of pollution reduction and can take the form of either a technology standard or a performance standard. A technology standard requires pollution producing firms to use specified technology. While it may reduce the pollution, it is not cost-effective and stifles innovation by incentivising research and development for technology that would work better than the mandated one. Performance standards set emissions goals for each polluting firm. The free choice of the firm to determine how to reach the desired emissions level makes this option slightly more efficient than the technology standard, however, it is not as cost-effective as the cap-and-trade system since the burden of emissions reduction cannot be shifted to firms with lower abatement.<ref>{{Cite web | url=https://www.khanacademy.org/economics-finance-domain/microeconomics/market-failure-and-the-role-of-government/environmental-regulation/a/command-and-control-regulation-cnx | title=Command-and-control regulation (Article)}}</ref>

==== Scientific calculation of external costs ====
[[File:Visualization of percentage price increases for broad food categories.webp|thumb|"Relative percentage price [∆] increases for broad categories [...] when externalities of greenhouse gas emissions are included in the producer's price."<ref name="10.1038/s41467-020-19474-6"/>]]
A 2020 scientific analysis of external climate costs of foods indicates that external greenhouse gas costs are typically [[environmental impact of meat|highest for animal-based products]] – conventional and organic to about the same extent within that [[ecosystem]]-subdomain – followed by conventional dairy products and lowest for [[organic food|organic]] [[Plant-based diet#Sustainability|plant-based foods]] and concludes that contemporary monetary evaluations are "inadequate" and that [[policy]]-making that lead to [[Sustainable food system|reductions of these costs]] to be possible, appropriate and urgent.<ref>{{cite news |last1=Carrington |first1=Damian |title=Organic meat production just as bad for climate, study finds |url=https://www.theguardian.com/environment/2020/dec/23/organic-meat-production-just-as-bad-for-climate-study-finds |access-date=16 January 2021 |work=The Guardian |date=23 December 2020}}</ref><ref>{{cite news |title=Organic meats found to have approximately the same greenhouse impact as regular meats |url=https://phys.org/news/2020-12-meats-approximately-greenhouse-impact-regular.html |access-date=16 January 2021 |work=phys.org |language=en}}</ref><ref name="10.1038/s41467-020-19474-6">{{cite journal |last1=Pieper |first1=Maximilian |last2=Michalke |first2=Amelie |last3=Gaugler |first3=Tobias |title=Calculation of external climate costs for food highlights inadequate pricing of animal products |journal=Nature Communications |date=15 December 2020 |volume=11 |issue=1 |pages=6117 |doi=10.1038/s41467-020-19474-6 |pmid=33323933 |pmc=7738510 |bibcode=2020NatCo..11.6117P |url=|language=en |issn=2041-1723}} [[File:CC-BY icon.svg|50px]] Available under [https://creativecommons.org/licenses/by/4.0/ CC BY 4.0].</ref>