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One More Externality Article Analysis

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In the paper "Comments: One More Externality Article" Peskin (1988) refers to the debate between Freeman, Bird, and Baumol and Oates to determine the distinction between depletable and undepletable externalities. Depletable means that if there is a fixed amount of pollution, it will be reduced as one person "consumes" it. When there is not a fixed amount of pollution that is reduced as it is consumed, then it is undepletable. For example, air pollution can be considered a depletable externality, because air pollution can be reduced by each extra person who “consumes” it. On the other hand, nuclear radiation can be counted as an undepletable externality, since nuclear emissions are generally permanent damages that cannot be reduced when an extra

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