Environmental internal failure costs
are costs of activities performed because contaminant and waste have been produced but not discharged into the environment. Thus, internal failure costs are incurred to eliminate and manage contaminants or waste once produced. Internal failure activities have one of two goals : 1 to ensure that the contaminants and waste produced are not released to the environment or 2 to reduce the level of contaminants released to an amount that complies with environmental standards, Examples of internal failure activities include operating equipment to minimize or eliminate pollution, treating and disposing of toxic materials, maintaining pollution equipment,licensing facilities for producing contaminants, and recycling scrap.