1.Find out the definition of Externality and share one example of positive and negative externality.

2. Total quantity of emission can be broken down into the following 3 components. Using the formula, answer the following question:

Total quantity of emissions = Number of vehicles Average kilometres traveled Emissions per kilometre

What are examples of incentives that might be introduced to force drivers to account for the external costs created when they drive cars?

References

Martha & Barry Field, Environmental Economics: Chapter 1,2 and 3