@Keith : we are not disagreeing. Of course, there is no reason to ignore relevant by-products other than in the "simplifying assumption" mode. In fact, standard economic theory says that efficiency requires "externalities" (e.g., pollution) to be properly priced or otherwise constrained - see the debates on carbon taxes vs carbon quotas (in models for "normative analysis", i.e., those used to discuss "what should be"). Still, if externalities are not priced and firms can in fact pollute without cost to themselves, then you need to make that assumption to describe their behaviour (in models for "positive analysis", i.e., those used to discuss "what is"). As I wrote earlier, that is how we can explain why we've got so much CO2 in the air: its disposal was free! Different models serve different purposes.