[dingsbumps]

Is this because you believe the free market will follow the most economically efficient path? What if the environmentally friendly options are always more expensive?

Without regulation or tax incentives, it's easy to ignore the externalities in your choices. As an example taken to the extreme: if there was no regulation against dumping your industrial waste in the river, the free market should use that option, as it's cheaper than properly disposing of the waste.

[joshuaheard]

It's a complicated issue, to be sure. Speaking generally, you might be correct, though I think taxes and regulation should be the last resort. For carbon-free energy production, I think there are many free market possibilities on the horizon: safe nuclear fission, nuclear fusion, fuel cells, battery technology, wind power, solar power, or some combination of them.

[ant6n]

But all that 'regulation' like carbon taxes do is internalize the cost of fossil fuels and adjust the different costs in the market. The 'free' market is changed like this all over the place - for example via import tariffs that change the market place to favor local production.

Regulation is really the first resort.

The last resort is things like out-right banning the use of fossil fuels or nationalizing the energy industry.