Environmental Externalities and their Internalization Through Voluntary Approaches

This chapterEnvironmental externality explainsInternalization how, in principle, the optimal level of pollution could be achieved by bargainingBargaining between the polluter and the victim. It is also explicated that there are many obstacles to the success of such Coasean bargainingCoasean bargaining. The chapter also discusses other voluntary approaches to internalizing environmental externalitiesEnvironmental externality, including in the case of multilateral externalitiesMultilateral externality where multiple polluters harm each other.