External cost

Costs incurred by an activity at the expense of another activity, of an environment, etc, and uncompensated or not supported by those who generate them. Under the Water Framework Directive 2000/60/EC, we are interested in external environmental costs of services related to water use and more generally water-related activities (withdrawals, discharges, developments, etc); e.g. the costs of exploration and exploitation of new resources due to the pollution of previously exploited groundwater are actually and ultimately supported by the subscribers to drinking water supply services on the price per cubic metre. One of the great practices of environmental economy is to reintegrate externalities into market exchange, externalities are internalized. In other words, environmental degradation (pollution, overexploitation, etc) is included into the prices that otherwise is ignored.