the free market equilibrium will not account for the costs of pollution on society. If the social costs of pollution are higher than the private costs incurred by the firm, then the true supply curve will be higher. The point at which the social marginal cost and market demand intersect gives the socially optimal level of pollution. At this point, the quantity will be lower and the price will be higher in comparison to the free market equilibrium. Therefore, the free market outcome could be considered a market failure because it "does not maximize efficiency". This model can be used as a basis to evaluate different methods of internalizing the externality. Some examples include tariffs, a carbon tax and cap and trade systems. History Prior to 19th century Air pollution has always accompanied civilizations. Pollution started from prehistoric times, when man created the first fires. According to a 1983 article in the journal Science, "soot" found on ceilings of prehistoric caves provides ample evidence of the high levels of pollution that was associated with inadequate ventilation of open fires." Metal forging appears to be a key turning point in the creation of significant air pollution levels outside the home. Core samples of glaciers in Greenland indicate increases in pollution associated with Greek, Roman, and Chinese metal production. The burning of coal and wood, and the presence of many horses in concentrated areas made the cities the primary sources of pollution. King Edward I of England banned the burning of sea-coal by proclamation in London in 1272, after its smoke became a problem; the fuel was so common in England that this earliest of names for it was acquired because it could be carted away from some shores by the wheelbarrow. 19th century It was the Industrial Revolution that gave birth to environmental pollution as we know it today. London also recorded one of the earlier extreme cases of water quality problems with the Great Stink on the Thames of 1858, which led to construction of the London sewerage system soon afterward. Pollution issues escalated as population growth far exceeded viability of neighborhoods to handle their waste problem. Reformers began to demand sewer systems and clean water. In 1870, the sanitary conditions in Berlin were among the worst in Europe. August Bebel recalled conditions before a modern sewer system was built in the late 1870s: 20th and 21st century The primitive