Those who are unaware of the problem of externalities suffer from a false consciousness, but this can be corrected through education and self-education, and turn into a true consciousness of our situation.
Regulations (like good environmental legislation) force businesses to "price-in" externalities so that today's consumer pays the true cost for the goods he buys, instead off-loading environmental costs to future generations.
So this is within our system that we can make rational decisions to implement regulations to help deal with the problem of externalities.
I mentioned bringing a false consciousness to a true consciousness. This requires a lot of effort today. This is a process of "Bildung", a process of education and self-cultivation. It's not easy for people to do this because the world is so complicated. Many things have to be considered.
For instance, look at this new Japanese bullet train. It is more efficient and will save energy. Now this firm developed the train under a system of capitalist competition. Even though the government probably kicked in some money even if just for basic research or financing.
Capitalism does seem to be able to improve efficiencies through the process of competition, and we must keep this in mind. https://www.cnn.com/travel/article/shinkansen-supreme-n700s-japan/index [sorry, expired link. This referred to the Shinkansen Bullet Train]
So we have the good with the bad. I like to think of the modern economy as Frankenstein on steroids. We created this monster economy, and now it turns around to potentially oppress us. This theory, in relatively modern times, is associated with Marx (we alienate a part of ourselves that comes back to haunt us), but ultimately, as far as the modern concept of alienation itself, to Hegel in his philosophy of nature, which no one studies.
The German word Entausserung, translated as alienation, I think properly means externalization. And this makes sense. The monster-economy we created goes out, meets his limits in the world, we learn something, and try to bring our monster home again in a more human form, and on a more human scale.
(This is much like the Biblical story of the prodigal son. He goes out into the world, I.e. he externalizes himself, he meets his limits, he learns something, he comes home again a wiser man.)