The Green Economy
Is "Internalizing Externalities" Really a Way Forward?

by Larry Lohmann

first published 2 October 2012

"Let's internalize the externalities" has become an important slogan of the new "green economy". Its logic is evident in the Kyoto Protocol, the UK's plans for an "ecosystem services economy", countless regulatory projects advised by environmental economists, and even in financial markets' efforts to commodify radical uncertainty. But is this a solution for the environmental and social problems thrown up by capital accumulation, or a perpetual motion machine that functions merely to create more problems and business opportunities?