Costs of Environmental

Sustainability (1 of 5)
• Sustainable development includes business
activity that produces the goods and services
needed in the present without limiting the
ability of future generations to meet their
meets.
• Environmental costs are the costs of
dealing with environmental issues, such as
BP’s costs in cleaning up the company’s spill
in the Gulf of Mexico.

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 Costs of Environmental
Sustainability (2 of 5)
• Environmental cost management is the
strategic implantation of systems for
identifying, measuring, controlling, and
reducing the private environmental costs
borne by a company or other organization.

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 Costs of Environmental
Sustainability (3 of 5)
• Environmental costs may be categorized in
several ways:
• Private environmental costs are those
borne by a company or individual. Social
environmental costs are those borne by the
public at large.
• Visible environmental costs are those that
are known and clearly identified as tied to
environmental issues. Hidden social
environmental costs cannot be clearly tied
to environmental issues.

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 Costs of Environmental
Sustainability (4 of 5)
• Visible and hidden environmental costs may be
further classified into one of three types
– Monitoring costs include the costs of
monitoring the regulatory environmental as well
as monitoring the production process to
determine if pollution is being generated.
– Abatement costs include costs to reduce or
eliminate pollution.

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 Costs of Environmental
Sustainability (5 of 5)
– Remediation costs include on-site and off-
site remediation costs. On-site remediation
includes costs of reducing or preventing the
discharge into the environment of pollutants
that have been generated in the production
process. Off-site remediation includes the
costs of reducing or eliminating pollutants
from the environment after they have been
discharged.

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McGraw-Hill Education.