It looks to me like outside this we there is a significant bunch of people who do not know or accept this. Actually, at some point I was pondering whether the main distinction [1] between conservative-populist movements and "the elite" these movements are against is exactly the point that "the elite" understands and acknowledges the concept of externality and wants to address this market failure with something, while the populists refuse to understand or accept the issue.
[1] At least we can be confident that the distinction is not wealth, money or political influence, what one could naively think elite has and non-elite not.
If the populists refuse to understand or accept the issue, the population refuses to understand or accept the issue.
It really depends on the population. Green parties are often pretty strong in wealthy European countries. Unfortunately, Greens also tend to be leftists that refuse whole idea of a free market. They'd rather ban things than handling externalities with prices.
The other problem is that externalities are hard to price. If the price is too low, the problem isn't solved. If the price is too high, people won't want to pay it.
In any event, the underlying problem isn't free markets itself, it's what the people want (or think they want).
The purpose isn't to make people stop polluting entirely, but to make it so they will only do so when it brings them a benefit larger than the societal cost of the pollution.
Why spend $$$ promoting and supporting recycling if a landfill tax is paying your wages?
The minimally logical conclusion (to me) is the public doesn’t want to pay for the externalities of X. Taxing X—assuming the tax levied is an appropriate amount to cover the externalities of X—makes actor Y who is doing X pay for X and its externalities, alleviating the burden on the public while avoiding taking an actual stand and/or engaging an effort to reduce X. Y does X? Y pays for it, not the public.
How much taxes on X adds to public revenue is mostly irrelevant, so long as it is enough to cover the costs of dealing with X without shifting that burden onto the general public via other taxes. If the revenue from X is enough to cover the costs of X’s externalities and also pays for wages and/or other public needs, that’s a net win for the public. You likely won’t see a city starting up a campaign to increase undesirable thing X just because it’d increase revenues.
Now, if the public really wants to reduce X by means of taxing X, it will likely choose to levy heavy, punitive taxes on X as doing X increases/continues, hoping to make it financially painful to those doing X to have to pay for X—for example, look at cigarette taxes. That can only go so far, though, before you encounter those for whom the added punitive tax is not a sufficient deterrent. Then it’s either a choice between more increases to get X to zero, or some other type of concerted public or legal effort to curtail X.
The act of taxing X isn’t enough of a signal to conclude the public is using the tax as a reduction effort. But it’s certainly a signal that the public doesn’t want to pay for X via standard revenues—and the public absolutely should not bear the burden for the negative externalities of any X. There’s no doubt a built-in hope that, assuming the costs of X’s externalities are known, taxing Y to pay for X will encourage reduction because—especially if Y is a company—Y wants to keep their expenses low, and really doesn’t want to pay for X. A city levying such taxes, assuming it is even moderately well-managed, will hope to see that the tax revenue for X will hit zero in tandem with X itself hitting zero—the success state[0].
[0]: I’m going to ignore the real-world chance that revenues from X get allocated to previously non-existing programs that then need to find a new source of revenue—but that’s a different problem.
In that case, X=car accidents - any public red-light-camera advocacy will say they reduce X.
Of course, you're right to say that a tax on X doesn't prove people dislike X - a tax on income doesn't mean citizens hate income. You could even argue a tax on alcohol means citizens like alcohol too much! But a subset of taxes, such as fines and some sin taxes, are presented in the public discourse as about reducing X rather than making money.
[1] https://www.salon.com/2017/04/05/this-may-have-happened-to-y...
I’d agree that some taxes are presented in public discourse as at least partially being about reducing some X—though fines shouldn’t be lumped in with taxes. Fines are worth considering as a different thing with their own reasoning and goals that often make them distinct from taxes—particularly because fines are punitive and come after known legislated/regulated behavior has occurred.
Inertia dictates that the tax will be permanent. But I hope you're right of course.
Why not have these taxes and also have subsidies that cancel them? At least you're naming the problem then, which would be a great step forward.
> and any working solution needs to be global.
I suppose you could introduce import taxes to solve this problem.
We’ve known this for over 100 years (https://en.wikipedia.org/wiki/Externality). And solutions to the problem have been proposed for as long (https://en.m.wikipedia.org/wiki/Pigovian_tax).
The problem with implementing these taxes are political; people with vested interests will argue long and hard against any new taxes, and any working solution needs to be global.