Fossil fuels, such as coal, oil, and natural gas, have major costs for the climate, the environment, and human health that are not accounted for in market pricing. Externalities are the names for these expenses. Externalities are produced at every stage of the fossil fuel supply chain, including extraction, transportation, refinement, and combustion.

The following are a some of the externalities of fossil fuels on the climate:

i. Ocean acidification: The ocean absorbs at least 25 percent of the carbon dioxide released by fossil fuels, altering the ocean's chemistry (pH). The rising acidity makes it more difficult for marine species to construct coral skeletons and shells.

ii. Extreme weather: According to the National Oceanic and Atmospheric Administration, using fossil fuels is causing climate change, which is causing increasingly frequent and severe extreme weather occurrences that result in disasters costing at least $1 billion per.

iii. Rise in sea level: Global sea level rise is being caused by the melting of glaciers and land-based ice sheets as a result of oceanic and atmospheric warming brought on by climate change. Since the late 1800s, sea levels have increased by roughly 9 inches, leading to more frequent floods, devastating storm surges, and saltwater intrusion.

The following are a some of the externalities of fossil fuels on the environment:

i. Air pollution: Hazardous air pollutants such as sulfur dioxide, nitrogen oxides, particulate matter, carbon monoxide, and mercury are all produced by burning fossil fuels, and they are all bad for the environment and people's health.

ii. Water pollution: Fossil fuels contribute to water contamination through oil spills and fracturing fluids. Between 1.5 million and 16 million gallons of water are used in each fracking well, and the wastewater that is produced can be hazardous and contain elements like arsenic, lead, chlorine, and mercury that can pollute groundwater and drinking water.

iii. Plastic pollution: More than 99 % of plastics are produced using fossil fuels. 300 million tons of plastic trash are created annually across the world, 14 million tons of which end up in the ocean and harm species and the food chain.