An Embedded Growth Obligation (EGO) is an economic mechanism that requires businesses to internalize the environmental, social, and economic costs of their activities. EGOs are implemented through taxes, subsidies, regulations, or other policy changes that modify the cost or benefit of activities or products that cause or prevent harm. This incentivizes a shift away from activities that are financially profitable but ecologically and socially destructive, towards activities that are ecologically and socially beneficial, and may be economically improved in the long-term as well. EGOs are a form of non-market policy which correct for externalities and recognize the long-term costs associated with short-term gains.
See also: exponential growth, economic growth, population growth, carbon pulse, ecological footprint