Regulations that make companies pay for negative externalities will most likely production costs.

Regulations that make companies pay for negative externalities will most likley INCREASE production costs. Negative externalities are negative impacts to something outside of production. For example, negative externalities of mining are environmental damage from the leaching of heavy metals into soil and water supplies. These are not a cost in production, but they are something negative that happens as a result of production in mines. Regulations requiring mining companies to pay for these negative externalities thus would increase production costs.