Consumption, by Source (Source: EIA Monthly

Energy Review)

Despite the gradual reduction in emissions from fossil fuels, many important environmental issues remain.

Along with the still high levels of air and water pollution, other issues include hazardous waste disposal,

destruction of wetlands and other wildlife habitats, and the impact on human health from pollution.

Externalities

Private markets, such as the cell phone industry, offer an efficient way to put buyers and sellers together and

determine what goods they produce, how they produce them and who gets them. The principle that voluntary

exchange benefits both buyers and sellers is a fundamental building block of the economic way of thinking.

However, what happens when a voluntary exchange affects a third party who is neither the buyer nor the

seller?

As an example, consider a concert producer who wants to build an outdoor arena that will host country music
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