Externalities, government requlations: A case of energy sector

Externalities are cost or benefits imposed on one person or a group of people by another without compensation. Economists have addressed the concept of externalities since the nineteenth century. An extensive body of literature evolved from these early works. Accordingly economist have developed principles for assessing cost of the externalities, after years of applications, these principles have helped establishing a set of procedures that has become known as the damege cost approach. This approach is the only approach for estimating externality cost that is consistent with broadly accepted economic principles. The primary objective of this study is to estimate the broad range of potentional externalities associated with nuclear power plant in Turkey. All electricity generation procedures involve some environmental impact. That is why externalities are very important during decision making process. Policy measures such as taxes, subsidies, and emission permits can also be used as means to reflect the estimated full costs of alternative options. In the second part nuclear power plants and its effects are investiagated. Turkey's first nuclear power plant will be built at Akkuyu on the south east mediterreanen coast. We calculated the cost of building a nuclear power plant and discuss its environmental effects. Key Words; Externalities, Positive externality, Negative Externality, Environmental problems, Public regulations, Economics and Environment, Nuclear Energy, Akkuyu, Energy, Cost Analysis