Absolutely agree. A classical "free market" approach would be to internalize the external costs (like pollution) and then let the market figure it out. Instead of the debate in the US of whether CO2 is causing climate change, we should be arguing what the cost is (in $/ton) and then apply that as a revenue-neutral carbon tax. And then let the market do its work.

For other pollution, for coal specifically, look at the costs borne by society (not reflected in the cost of generation) to deal with coal ash containment.