How does this apply to recycling though? Landfills in developed countries have little, if any externalities, because they're engineered to contain waste.
https://practical.engineering/blog/2024/9/3/the-hidden-engin...
That's the same thing I've seen demonstrated. It's really too bad that the plastics industry seized on the opportunity to greenwash wasteful amounts of plastic packaging by giving people a recycling bin that claims to do something useful with that discarded plastic, when in reality it's rare for post-consumer plastic to make any rational sense (other than those things like we're discussing, where people in practice waste even more resources in the recycling process just to feel good that the plastic material itself was technically not 'wasted').
> And all these additional costs likely make it the "wrong" decision since they likely contribute to carbon emissions or otherwise wasteful use of the earth's resources
I think this doesn't often hold true, yes, an efficient market begets economically efficient resource allocation, but there's more to environmentalism than efficient resource allocation. Your example is good, it's certainly more economically efficient to use less petroleum when transporting goods, and that efficiency can be reflected in final costs. But let's look at another example:
Say you're buying lumber to build a house. There's a local lumber farm that sustainably grows and cuts down trees. Since its close, transportation costs (and associated emissions) are low - largely coming from amortized land costs and labor. However there's another company that buys cheap land from farmers in the Amazon, with cheaper labor, ships it up via freight, and sells it for marginally cheaper. The costs in the latter example are largely driven by transportation - and while cheaper, has a significantly larger carbon impact.