Externalities are costs created by a company that do not appear on its balance sheet. Externalities aren’t ‘priced in’ to products—their costs show up elsewhere, including far in the future. The term is not new and one of the first people to describe it was economist Arthur C. Pigou in the 1920s. A modern example of an externality is the global, yearly 50 million tons of toxic e-waste from people regularly upgrading to the latest smartphone. Another example is the overload of information and fake news that appears if one person’s TikTok, filled with disinformation, can be seen by millions. One of the most significant examples of an externality is the consequences of extraction that occur when a company removes resources from an environment quicker than they can be replenished.
The abilities of humans to build tools allow us to have more power to extract from the Earth than any other species. It is happening right now with the mining of rare-earth elements such as lithium to produce parts for technologies that are necessary to sustain the comfort of our daily lives. This leads to multi-polar traps: situations in which everyone engages in harmful behaviour not because they want to but because they don’t have any other choice in the current moment. Technology is extremely profitable so it usually develops faster than our ability to regulate it or understand its long-term effects. Often the best way to escape a multi-polar trap is through collaboration and regulation. It strengthens digital open societies instead of weakening them, giving us the capacity to collaboratively solve the problems citizens and communities face. (Sabīne Šnē)