The cost that needs to be incurred for certain externalities or damages inflicted on surrounding environment or neighborhood by an entity’s operations. For example, oil drilling companies may experience a platform blow-up or leak into the sea, causing the death or destruction of natural life onshore of offshore. The mess has to be cleaned up (i.e., abated) by the very entity that gives rise to it.

Other examples include nuclear waste, noise, and destruction of common or private resources in the broader ambience.

Abatement cost relates to all the expenses required to fix or remove all the undesirable nuisances or byproducts that arise from operations such as digging, production, etc.