> The negative externalities of alcohol are substantially exaggerated. Public health researchers go crazy inventing externalities for things they don't like.

…

> With cigarettes the damage and causation is much clearer. Something like 1 in 2 people who smoke will die early from a smoking related cause.

But the externalities of tobacco are essentially non-existent: 'second-hand smoke' is one of those invented public-health externalities. Tobacco preponderantly affects those who smoke it (although of course young children of older parents may lose their parents to smoking-related illnesses).

> 'second-hand smoke' is one of those invented public-health externalities

The immediate effects of second-hand smoke on asthmatics are not exactly invented, nor, alas, hard to notice.

“Cigarette smoke is the residue of your pleasure. It contaminates the air, pollutes my hair and clothes, not to mention my lungs. This takes place without my consent. I have a pleasure, also. I like a beer now and then. The residue of my pleasure is urine. Would you be annoyed if I stood on a chair and pissed on your head and your clothes without your consent?”

— Sign from Ken’s Magic Shop

How do you explain the millions of non-smokers dying of smoking related illnesses if second hand smoke is an invented thing?

Air pollution has other sources like cars, coal plants, VOC's released from manufactured materials, etc.

Which coincidentally impacts people that work or live in the vicinity of heavy smokers much worse?

What study are you refering to exactly?

Because that statistic was made up? You know you can still get lung cancer even without have ever inhaled second hand smoke.

True about second-hand smoke. It was exaggerated.

The big externality for tobacco smoking is the health costs of those who smoke and die and get very sick from it, both early and with health costs.

Even in the US the public wound up footing the bill for the public health costs. At a certain point taxes on cigarettes do cover the health costs. That point may have been reached in Australia. It depends on what people include and how big they make the damages.

Another externality is that a lot of non-smokers dislike breathing in second-hand smoke, apart from whatever negative health impacts it may have–yet inevitably they end up doing so due to smoking in public places, smoking neighbours, etc.

It is hard to measure the value of this externality. But in the abstract it must have some value: suppose there was a magic spell which made all secondhand smoke go away, and using it had no negative side effects – how much would the average non-smoker be willing to pay for this spell? Personally I'd be willing to pay at least $1/day, and let us assume the average adult non-smoker puts the same value on it as I do. Then, by rough estimation, I'd say there are about 16 million adult non-smokers in Australia, which implies the cost of this externality in Australia is around $5.8 billion a year. That dwarfs in comparison to the health costs, but it isn't nothing either.

no, my mum has emphysema, she's never smoked in her life, but she's surrounded by smokers. Second hand smoke is a real thing.

And how do you know it's tobacco smoke that caused her illness and not your car exhaust system?