It is absolutely the government's job to regulate externalities. Otherwise, personal virtue is just subsidizing third party vice. Energy is fungible. Every joule you save lowers the cost for people who don't care.
Regulate externalities sounds like a nice way of phrasing what would amount to authoritarianism.
It seems reasonable to want a government to help ensure externalities aren't being ignored in prices, but not to regulate them by saying how much and what types of things people can use. I don't want my government allocated a set amount of energy I use, for example, but I would be fine with them ensuring prices accurately reflect the true cost.
Ironically they often do the opposite, subsidizing energy and food costs which make things cheaper and hide externalities.
