Externalties And How they Affect The Economy

Current economics are based only on supply and demand and do not factor in the external costs. Common mistakes are incorporated in today’s economic model: our resources can only be thought of as infinite, the benefits and costs are thought to be included with supply and demand, the future effects are not to be included, and economic growth is a good thing. These benefits or costs that affect the non-consumers are known as externalities. Today’s common negative externalities range from long-lasting problems in human health, damage done to properties, creation of less desirable environmental features or factors, and damage done to the natural beauty that people desire. These expenses from the damages become put on the people and it's their job to pay them off. 

(The first chart is a basic supply-demand curve; the second one is a marginal benefit and cost curves. The marginal benefit and cost curve is used to figure out a equilibrium point at which the cost of the resource use and cost to clean up pollution is equal with the benefits of the resource use. Environmentalist and other advocates believe that these charts are biased, because they focus on just the resource and not the ecosystem.)

http://www.enviroliteracy.org/article.php/1323.html