In addition to the points that the other commenters raised, generally externalities such as pollution are worse when the entity creating the externality does no

In addition to the points that the other commenters raised, generally externalities such as pollution are worse when the entity creating the externality does not have to worry about paying for it. This is why authoritarian governments are especially bad at polluting. Democratic governments are second-worst, since although they may be questioned and legally challenged, governments like to carve out a lot of exceptions for themselves (see things like the Kirtland AFB water pollution). Capitalists, with the power of limited liability behind them, are third-worst, but through careful management of incentives and regulations government can mitigate the issue better than it can mitigate itself.