1. Check List Environmental Costs From Lecture #3

2. Prevention Costs - definition Environmental prevention costs are the costs of activities carried out to prevent the production of contaminants and / or waste that could cause damage to the environment. Some examples follow:

3. Prevention Activities Evaluating and selecting suppliers Evaluating and selecting pollution control equipment Designing processes Designing products Carrying out environmental studies

4. Prevention Activities (continued) Auditing environmental risks Developing environmental management systems Recycling products Obtaining ISO 14001 certification

5. Detection Costs - definition Environmental detection costs are the costs of activities executed to determine if products, processes, and other activities within the firm are in compliance with appropriate environmental standards. Some examples follow:

6. Detection Activities Auditing environmental activities Inspecting products and processes Developing environmental performance measures Testing for contamination Verifying supplier environmental performance Measuring contamination levels

7. Internal Failure Costs - definition Environmental internal failure costs are costs of activites performed because contaminants and waste have been produced but not discharged into the environment. Some examples follow:

8. Internal Failure Activities Operating pollution control equipment Treating and disposing of toxic waste Maintaining pollution equipment Licensing facilities for producing contaminants Recycling scrap

9. External Failure Costs - definition Environmental external failure costs are the costs of activities performed after discharging contaminants and waste into the environment. Some examples follow:

10. External Failure Activities Cleaning up a polluted lake Cleaning up oil spills Cleaning up contaminated soil Settling personal injury claims (environmentally related) Restoring land to natural state

11. External Failure Activities (continued) Losing sales due to poor environmental reputation Using materials and energy inefficiently Receiving medical care due to polluted air (S) Losing employment because of contamination (S)

12. External Failure Activities (continued) Losing a lake for recreational use (S) Damaging ecosystems from solid waste disposal (S)