I agree with your abstraction of the problem, but I think you stopped half-way.

Regulators, producers and consumers are all following the same interconnected incentive structures, many of which have been designed with efficient production and an exponential increase of consumption in mind, not environmental concern.

It makes sense for these companies to operate, following their obligation to shareholders. They are, by definition, successful and so the idea that they should be diminished in any way by taxation/regulation creates a dissonance that can easily be loopholed or simply undone by the next gov't. Tax is a political lever, but the incentives are emergent economic atttributes. This means that, as soon as there is enough economic influence within politics, the lever doesn't do much anyway.

And yet, the cap-and-trade for sulfur-dioxide worked really, really well. See https://en.wikipedia.org/wiki/Acid_Rain_Program

Our traffic congestion charging program here in Singapore also works really well (and was famously adopted by London later).