Attributing costs to the environmental impacts associated with industrial activities can greatly assist in protecting human health and the natural environment as monetary values are capable of directly influencing technological and policy decisions without changing the rules of the market. This paper attempts to estimate the external cost attributable to the atmospheric pollution from,medium and high environmental burden' industrial activities located in the greater Athens area and the benefits from Best Available Techniques (BAT) introduction. To this end a number of typical installations were defined to be used in conjunction with the Impact Pathway Approach developed in the context of the ExternE project to model all industrial sectors/sub-sectors located in the area of interest. Total environmental externalities due to air pollutants emitted by these industrial activities were found to reach 211 M(SIC) per year, associated mainly with human mortality and morbidity due to PM10 emissions, as well as with climate change impacts due to CO2 emissions for which non-metallic minerals and oil processing industries are the main sources. The results obtained can be used as the basis for an integrated evaluation of potential BAT, taking into account not only private costs and benefits but also the environmental externalities, thus leading to policy decisions that maximize social welfare in each industrial sector/sub-sector. (c) 2007 Elsevier Inc. All rights reserved.