Externalities are costs or benefits of an activity that spill over and are experienced by

an unrelated third party not directly involved in the production or consumption

(Kenton, 2021). Externalities can be either positive or negative.

Positive externalities is defined as benefits from production or consumption

activities experienced by unrelated third parties. They occur when benefits spill over
on both the private and social level.

An example of Positive Externalities that is currently happening in my country

(Kenya)
An example of positive production externalities that we currently experience in my
country is Research and Development activities (R&D). R&Ds conducted by
organizations and private entities can create positive externality in that in as much as
the business profits increase, added benefits to the society in terms of knowledge level
and solution to societal problems is also addressed. The government always aim to
support companies and startups that are involved in research and development aimed
at solving specific solutions that are likely to benefit citizens either directly or
indirectly by addressing current and emerging challenges to sustainable development. The
support involve providing supporting business environment, giving them national
research funds and grants, giving them property rights such as intellectual property
rights, or providing necessary structural and infrastructural support in terms of
access to incubation center and information access.

The second example is (which is an example of positive consumption externalities) that

I cannot forget to mention is Vaccination, especially with this COVID-19 pandemic,
whereby our government is encouraging citizens to go for COVID-19 vaccination,
which will not benefit the individuals vaccinated, but other parties, thereby reducing
the infection rate.

Negative externalities; on the other hand, is defined as negative consequences of a

production or consumption activity experienced by unrelated third parties.
An example of Negative externalities that is currently happening in my country
(Kenya)

An example of these externalities that we face in our country is water pollution,

whereby plastic papers, industrial wastes and other materials are dumped into the
water sources. Such emission reduce the water quality that in turn affect the people
consuming that water and affect the aquatic animals, including fish as well.

What our government is doing to fix the issues of the negative externality

To reduce the negative effects on this, the government has implemented stringent
measures to offset the effects of water pollution. This has been realized through the
ban of plastic papers and bags use in the country. The government has also signed
several pledges and partnerships such as the Clean Seas initiatives in order to rid
waterways of plastic wastes.

References

Kenton, W. (2021, May 7). Externality. Retrieved May 12, 2021, from

Investopedia.com website:

https://www.investopedia.com/terms/e/externality.asp