People do not make choices based on all global facts. If everyone in the country bought a car that pollutes less, we're all better off. If only I buy a car that

People do not make choices based on all global facts. If everyone in the country bought a car that pollutes less, we're all better off. If only I buy a car that pollutes less, and everyone else does whatever, I am poorer but not healthier. Thus it makes sense to incentivize individual choices that benefit society. Additionally, entrenched markets can be difficult to enter. If solar would win a fair race against petroleum, but it's starting centuries later, it may have no chance without initial subsidies.