For example, a business routinely dumps its toxic waste into a watershed, polluting that watershed and imposing huge costs on all the other users of the watershed that require non-toxic water. As this lowers the ‘market price’ for the goods produced by the business, the incentive is to always do this rather than pay the cost of safely processing the toxic waste. See for example the massive PFA problems. Here: https://www.usgs.gov/news/national-news-release/tap-water-study-detects-pfas-forever-chemicals-across-us
Putting a tax on externalities isn’t artificially increasing the cost of the fuel. It’s fixing a market failure.
I’m sorry, what?
Pollution has a cost to society. Someone has to pay for it. Putting that cost on the polluter is the most efficient way to handle it.
For example, a business routinely dumps its toxic waste into a watershed, polluting that watershed and imposing huge costs on all the other users of the watershed that require non-toxic water. As this lowers the ‘market price’ for the goods produced by the business, the incentive is to always do this rather than pay the cost of safely processing the toxic waste. See for example the massive PFA problems. Here: https://www.usgs.gov/news/national-news-release/tap-water-study-detects-pfas-forever-chemicals-across-us