...a term used often in economics to describe the output of a process that is not the primary goal of that process. For example, if I'm mining coal, I'm trying to find and extract coal to sell. In the process, however, I'm producing pollution, but the pollution is secondary to my goal of mining coal. (As a side point, I said "intentional" because I know that, in the process of mining coal, I'm going to create pollution -- it's intentional, even if not desired.)

You can also create positive externalities. For example, if I want to beautify my own yard, then I will benefit, but so will the neighbors if they, too, get to look at a nicer yard in the neighborhood. The benefit to them was not the primary purpose of my landscaping. It was just an externality created in the process of doing so, albeit a positive one in this case.

Back to negative externalities, the problem arises when the secondary effects of my activity impinge on others' liberty. I have the God-given rights to life, liberty and the pursuit of happiness, but I may not exercise them in such a way as to impinge on someone else's rights to the same. In the coal example, I have the right to pursue coal-mining, but I don't have the right to pollute someone else's property in the course of doing so. Thus, the pollution can be regulated, as I have no right to pollute, and the pollution infringes on someone else's rights.

[Post edited by Los Angeles Hoo at 12/06/2021 5:03PM]