ex·​ter·​nal·​i·​ty | \ ˌek-ˌstər-ˈna-lə-tē How to pronounce externality (audio) \
plural externalities

Definition of externality

1 : the quality or state of being external or externalized
2 : something that is external
3 : a secondary or unintended consequence pollution and other externalities of manufacturing

Examples of externality in a Sentence

Recent Examples on the Web And in classical economics, this is called an externality. Manavi Kapur, Quartz India, "Delhi’s air pollution could have a fix in behavioural economics," 29 Oct. 2020 Ignoring the dictum of separating climate policies into narrow buckets, isolating the objective of pricing the negative carbon externality. Gernot Wagner, Bloomberg.com, "Biden’s Climate Plan Has United Coalitions By Being Broad," 23 Oct. 2020 Climate change, in many ways, is the ultimate negative externality. Gernot Wagner, Bloomberg.com, "Cities Hold the Key to a Low-Carbon Economy," 29 Aug. 2020 But there is an additional benefit to the rest of us – the positive externality – from the delivery. Leigh Osofsky, The Conversation, "Striking Amazon, Instacart employees reveal how a basic economic principle could derail our ability to combat the coronavirus," 7 Apr. 2020 Even if pricing the negative carbon externality is key, the path to getting there might be via driving down the price of alternatives. Gernot Wagner, Bloomberg.com, "Carbon Taxes Alone Aren’t Good Climate Policy: Gernot Wagner," 7 May 2020 In the context of the pandemic, infection is one obvious negative externality. Max Lockie, Quartz, "US businesses want immunity from coronavirus lawsuits," 24 Apr. 2020 For example, a business that pollutes creates a negative externality that costs its community and society. Max Lockie, Quartz, "US businesses want immunity from coronavirus lawsuits," 24 Apr. 2020 Green Tech Warning labels could combat the abstract nature of climate change and could draw attention to the externalities of fossil fuel usage. Courtney Linder, Popular Mechanics, "Climate Experts Want Fossil Fuel Warning Labels At the Pump," 5 Apr. 2020

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'externality.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

See More

First Known Use of externality

1673, in the meaning defined at sense 1

Keep scrolling for more

Learn More about externality

Time Traveler for externality

Time Traveler

The first known use of externality was in 1673

See more words from the same year

Statistics for externality

Cite this Entry

“Externality.” Merriam-Webster.com Dictionary, Merriam-Webster, https://www.merriam-webster.com/dictionary/externality. Accessed 26 Feb. 2021.

Style: MLA
MLA Chicago APA Merriam-Webster

Comments on externality

What made you want to look up externality? Please tell us where you read or heard it (including the quote, if possible).


Test Your Vocabulary

February 2021 Words of the Day Quiz

  • squirrel in winter
  • Which is a synonym of perdure?
True or False

Test your knowledge - and maybe learn something along the way.


Anagram puzzles meet word search.

Love words? Need even more definitions?

Subscribe to America's largest dictionary and get thousands more definitions and advanced search—ad free!