A holistic approach to externalities is key.

The most general and holistic proposal was developed by Beeks and Lambert [68] (2018). In this scenario, fiscal instruments influence market forces by inducing broad, crosscutting, socio-environmentally positive changes in production and consumption. Thus, it is not about correcting the most serious single impacts but transforming the entire economic system [11].

Beeks and Lambert [68] argue that negative externalities will be produced as long as they are economically viable. They will inevitably be transmitted to current and future societies in the absence of government actions capable of counteracting them. One way to reduce these externalities involves acting through market mechanisms—prices, in particular—to decrease associated profitability. For the authors, the objective is not only to transfer certain externalities to prices in accordance with a cost–benefit criterion—as mainstream environmental economics does—but also to design a comprehensive pricing system that incorporates sufficient incentives to change the behavior of economic agents towards sustainable patterns. They explicitly agree with Daly [41] that reducing consumption-related impact may be the best way to reorient the current economic system, which is based on hyper-consumption and works by appropriating the natural (free) system, negatively affecting humanity and the economy itself. To do so, Beeks and Lambert [68] (p. 7) proposed estimating a new cost factor for all services and products, which would integrate all externalities generated in production and consumption. The aim is to fully cover all negative and positive externalities by means of an externality factors (EF) system. These would include estimates for not only CO2 and GHG emissions, but also all pollutants affecting water, the atmosphere, soil, biodiversity, the ecological system, and human well-being.

Rather than designing or assessing single taxes to correct a specific externality, this proposal involves creating a tax system that attempts to counteract the combined sum of the various externalities. Another novel element is that it adds on the estimated cost of negative externalities and discounts positive externalities, so that the external factor added to the price of the good reflects the balance of them all. Using market forces, the EF system would raise the selling price to discourage negative production and consumption or reduce it to encourage positive production and consumption. The important thing here is that the tax system itself (taxes, subsidies, benefits) promotes a transition to environmentally friendly and safe practices.