Assessment of External Cost as an Aggregated Indicator of Sustainable Industrial Development - Air Pollution Case Study in Ukraine

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The size of the Gross Domestic Production (hereinafter, “GDP”) is not the sole indicator for measuring the richness of a nation, because it doesn’t reflect the costs to public welfare, human health and environment as well as the other various costs that the macro-economy pays elsewhere within a nation such as energy security cost. In microeconomics theory, these unaccounted costs are called “external costs”. Traditional economic assessment of industrial development has tended to ignore these costs. However, when the government plans and promotes the industrial development, it is necessary to account all those different costs for decision making.

This study focuses on the impacts to the human health that are caused by air pollutions from the industrial activities. As possibilities, various indicators can be used for showing the degree of health impacts. In general, there might well be several pathways and end points that result from any emissions. These end points are indicators of impacts. In this connection, the indicators selected may depend on the choice of methodologies. As many impact indicators are selected, the process of comparison becomes complex. Therefore, a preferred approach is to choose priority impacts on which to focus comparisons.

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