Which activity is an example of an externality that can affect public health?

Advance your understanding of sustainability accounting with the FSA Level 2 Exam. Practice with engaging quizzes and detailed explanations to enhance your learning experience. Prepare to excel!

High levels of greenhouse gas emissions are a significant example of an externality that can impact public health. Externalities refer to costs or benefits incurred by third parties who do not participate in a transaction, and they often affect the well-being of the community or environment. In the case of greenhouse gas emissions, the pollutants released into the atmosphere can lead to severe health consequences for the general public, including respiratory diseases, cardiovascular issues, and other health problems related to air quality.

These emissions can arise from various sectors, such as transportation, industry, and energy production, and their effects are not confined to the individuals or organizations that produce them. Instead, the broader population bears the costs in terms of health care expenditures and reduced quality of life, illustrating the concept of negative externalities.

In contrast, successful marketing campaigns, increased customer satisfaction, and lower production costs are more about internal organizational outcomes and typically do not carry the same level of direct impact on public health or community welfare as greenhouse gas emissions do. While these factors can have positive or negative implications for a business, they do not inherently represent the kind of external consequences that greenhouse gas emissions do, particularly regarding public health.

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