One of the most interesting and important aspects to environmental economics is assessing the full cost of externalities that previously went uncounted. In the case of gasoline, for example, the added costs would be associated with the health effects of pollution, among other things, such as military spending. It’s not easy to come up with an exact number for the “real price” of a gallon of gas, though I’ve seen it estimated as high as $15. Here is a pretty good list of factors that one might have to consider to do the math. Check it out.
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