An externalized cost is the part of the true cost of producing a product or service that the producer is allowed to leave for someone else to pay. Pollution is a prime example, because if taxpayers pay to clean up a toxic waste dump, if others suffer ill health due to exposure to waste products, or if costal cities drown due to global climate change, those costs have or will have been passed on to someone else.
All costs must be included in the cost of all goods and services.
But, but, but… it might put some corporations out of business!
So be it. If the true costs (with all environmental costs internal) of a product or service are so high that there is insufficient demand to support the producer, then that producer ought to fail.
But, but, but… It might cost corporations 1/3 of their profits!
So be it. If internalizing all costs cuts their profits, their profits are too high.
I have no doubt that Republicans will unanimously oppose this idea. How odd. Because what I am arguing here is really nothing more that capitalism in a free market.