Why are market failures the hallmark of the environmental domain ?

[Sienna]

The basic idea is that if all the social costs were contained in the market price, then market decision-making would be good for the environment. But what causes environmental problems, he's saying, is that the market decisions don't contain all the social costs.

For example, suppose a mechanic has a shop next to the river. When he changes people's oil, he can choose between disposing of it properly, which costs $10, or dumping it in the river. So he dumps it in the river. But the costs to everybody downstream, in terms of lost fishing product, and dirty clothes, and so on, is *more than $10*.

What the article is saying, is that's an example of "market failure". The "social costs" of disposing of the oil by dumping it in the river, are not taken into account, and therefore the market fails to "allocate resources efficiently".

The problem with this theory, is that the river is not owned by a private owner - it's owned by the government. It's not a market failure, it's a government failure. If the river was owned by a private owner, he would charge accordingly.

Therefore the problem water being "underpriced" is not a market failure. it's a government failure. Fish? Same thing.

Timber. How do we know it's "underpriced"? How does the author know?

Therefore although environmentalists often allege market failures, either
a) the problem is not caused by the market, it's caused by government, e.g. water pollution, air pollution, extinction of species managed by government, and
b) their allegation that environmental resources are "underpriced" is just a bald assertion. If people don't value it much, then it's correctly valued at a low price.