[isykt]

> But this has no bearing on the question of whether it's rational to assign higher prices to naturally produced diamonds.

Sure it does. In economics, it’s called a negative externality, and it’s a common topic when discussing pricing the output of industrial processes.

>But unless they can all coordinate and change the market price in unison…

They don’t need to. We have governments that do that, through mechanisms like taxes and tariffs.