this post was submitted on 10 Oct 2023
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I'll just start by saying we're in agreement on this. The market doesn't price in externalities. But to your first point, it's literally the market (i.e. people) deciding they aren't willing to pay 10% more for manufacturing that costs more but reduces pollution.
If there are two competitors in a market, company A and company B:
Company A produces a product using the cheapest legal manufacturing that pollutes more, and company B does the same thing but cleans up their act for a 10% increase in cost, company B's market share will shrink, and they will eventually fail or be absorbed by a wildly successful company A. This is people voting with their wallets, and the companies are behaving rationally. We're essentially vilifing companies for responding to consumer behavior in aggregate. Obviously this is addressed through legislation and regulation which creates a level playing field for all competitors with environmental regulations everyone adheres to equally.