The answer is “negative externalities.” Externalities are additional positive or negative consequences (costs or benefits) that happen to a third party, who did not have any decision in the matter at hand. Some examples of negative externalities which affect society or the environment include increased air pollution in a residential neighborhood due to the construction of a highway nearby or the destruction of wetlands due to the construction of a dam upriver. It is the government’s job to study and regulate the possible negative externalities before projects are undertaken in order to limit their impact.
