1. Life Cycle Assessment and Externalities
Notes for this presentation are available on the Activity 9 webpage:
Activity 9:
The Real Cost

2. Image Credit:
Mark Wagner (free teaching materials)
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3. Other Life Cycles

4. General Life Cycle of a Product
Cradle to
Grave

5. Raw Materials of a Cell Phone
Image Credit (Liquid Crystal Display):
MadeHow.com
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Image Credit (Oil):
Oil Monster
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Image Credit (Elements):
Nickel - Image retrieved from
Lithium – Image retrieved from
Cobalt – Image retrieved from
Cadmium - Image retrieved from
Zinc - Image retrieved from
Copper - Image retrieved from

6. Environmental Impacts
Greenhouse gas emissions
Ozone depletion
Terrestrial toxicity
Aquatic toxicity
Human health
Eutrophication (increasing nutrients in water)

7. Externalities
An impact on a third party caused by a decision made by a producer or consumer. +
Positive: When the impact is beneficial to the third party -
Negative: When the impact is harmful to the third party

8. Positive Externality
Beekeepers keep bees for the honey they produce. The bees also pollinate nearby crops. This added benefit to nearby farmers is not reflected in price of honey.
Image Credit:
Larry Korhnak, University of Florida
Image retrieved from

9. Negative Externality
Burning fossil fuels causes air pollution that can harm human health. The added costs of increased healthcare are not included in the price of electricity.

10. Reducing Externalities
Externalities can be internalized.
Adjusting the price to account for the benefits or costs to the third party
How?
Corporate responsibility
Government regulation
Consumer responsibility
Tax