Items from 2 people Maruthi Chekuri follows

The mainstream economic position is that externalities are not only real but very important, and the best way to deal with them is internalizing them, usually by appropriate taxes or subsidies, or mostly equivalent ways such as cap&trade, which strangely some consider Pigovian, and some don't:

While Pigovian taxes are economically-preferred way to deal with externalities, they're not the only way and that's due to the second big concept which libertarians pretend doesn't exist - transaction costs.

as the point of government is largely taxing and subsidizing in a way that corrects market failures, and running parts of the economy which market is particularly bad at running - such as police, healthcare, pensions, social security and such. And at least in Britain the train system, which seems private companies seems to be completely incapable of running compared to Deutsche Bahn or even TFL.