Members' Research Service By / May 9, 2023

Understanding silent and invisible assets

Global and cross-border crises alike have made it clear that health, environmental protection, peace, and food and energy security cannot be achieved independently from each other.

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Written by Cécile Remeur.

At a time when global and cross-border crises are highlighting the interconnections between health, environment, peace, food security and energy sufficiency, notions such as externalities, public goods and biodiversity boundaries are gaining renewed interest, as a strong grasp of the various aspects of challenging situations becomes essential to help frame policy responses.

The notion of externalities is about asking whether all elements have been accounted for in price setting. When this is not the case, the mismatch is described as a positive or negative externality. The question then is how to correct the situation through pricing and with a price signal – something that can be achieved through taxation or regulation.

Beyond pricing, public goods – as opposed to private goods – are goods and services that can be enjoyed by all. They bring advantages to society as a whole, and their geographical scope can vary from local and regional to global.

Moving one step further, it is necessary to consider the effects on public goods of activities that might not be seen or occur at the same time or in the same place as the activities themselves. This relates to notions such as tipping points, footprints, sustainability and the preservation of biodiversity.

This briefing aims to shed light on those invisible effects, to complement existing discussions and pave the way for new tools to address environmental challenges.

Read the complete briefing on ‘Understanding silent and invisible assets‘ in the Think Tank pages of the European Parliament.

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