Yes, but some say that it is not taxed enough relative to the environmental costs.
ExACTly, ERD50! The "savings" going in to one pocket can easily come out of the other --even if you don't look at pollution alone, but include shared cost burdens like endless congestion (what's your hourly rate for sitting in traffic?), paying for new roads, and paying for wars to secure "our" oil supply.
But leaving aside these extrapolations, let's just look at the concrete trade efficiencies or lack thereof.
In a perfect "free market" ERD50's scenario of bar codes and so forth could happen. But many underlying costs are hidden or diffused. I remember trying to get it through an MIT consultant chick's head that "cost-cutting" did not make costs "go away" but was essentially just off-loading your cost on someone else. Especially in the US, it sometimes "makes more sense" to truck things rather than use railroads. Not because it is always OVERALL cheaper, but because we have low taxes on gas, and "free" highways where we don't have "free" railways. A private company might buy out an inner-city rail yard to put up a series of big-box stores you have to drive to; the local gov't. might play along thinking of an increased prop. tax base.. so, poof! no more rail access to the city. The patchwork of local/state/federal/international/public/private doesn't allow for the most efficient approach.
No one is in charge of (nor do consumers have the overview of) the entire system of tariffs, taxes and public and private costs, so no one has either enough incentive or enough information to change anything.
There was an interesting article in the New Yorker some months back about new building construction and energy. Basically a consultant had worked with a developer to engineer an office building in such a way that an initially higher construction outlay would pay itself back 10 or 20 times in energy savings. But because the extra work would cause the project to be delivered a month later than planned, the whole idea went down the tubes since the rental agent party to the contract didn't want to lose a month's profits, IIRC correctly. So someone not wanting to lose a few thousand in personal profit blocked hundreds of thousands of dollars of savings for everyone else, to say nothing of the energy impact!!
I'd agree with ERD50 if the market were 100% free and 100% transparent, but you have to look at ALL the artificial incentives and disincentives built into the chain. We tend, I think, to have a simplistic notion that whoever builds the better/cheaper mousetrap will win out, and forget all the middle steps.
Between the Australian wine, the Californian wine and the Italian wine (assuming the raw materials and finished product are of equal quality and thus equally desirable to the end consumer who is willing to spend an equal amount of cash for each):
-Are the producers taxed equally at the corporate level?
-Are their workers paid equally (PPP)?
-Are the workers' insurance/disability/health costs subsidized or non-existent?
-Are workers' pensions mandated or optional/non-existent ?
-Are there gov't. mandated quality/safety controls? What are they and how much do they cost and are they effective?
-Are their energy costs taxed more highly or are they effectively subsidized?
-Is the land use taxed more highly or effectively subsidized?
-Are there import/export tariffs?
-Do they enjoy gov't. aid in promotion and advertising?
-Do they enjoy gov't. aid in R&D for better crop yield, better disease control, etc.?
-Do they assume some of the responsibility of being relatively environmentally friendly, even if not "organic".. or do they pass their burdens on to the gov't./locals for things like pesticide run-off?
And so on, and so on... and that's all before the product even gets out the door, for the most part. The free marketeers would probably blanch at the quantity of subsidies the US offers to certain domestic agribusinesses.
Without information, consumers can't effectively choose. We can only base our choices on the price and our limited perception of product quality. There will never be labels that say "this product is made by slave labor in the Marianas"; they will say "made in USA". There will never be labels that say "this apple has been irradiated". If a product is made in Mexico, we won't/don't want to see a photo of the raw sewage or open drums of toxic chemicals out back of the factory; we like that it's CHEAP!
I don't know the answer... but it's complicated, complicated, complicated.
No more supermarket olive oil for me, though. I'll pay the extra buck or two to get it down the street, where I see the local olives being ground and expressed right in front of my eyes. (Despite the lack of irradiation and hairnets..