Generally, land is valuable (and therefore under this scheme highly taxed) because people want to live there. And if they can't live there, they'll live somewhere else, likely involving a longer commute that is worse for the environment.
Costs can be externalized, but at the environment level they still exist even if outside the city of consumers. It's also often the case that externalizing those costs adds even more impact as the product has to be shipped in and the waste shipped back out.
I don't understand your argument. Are you saying that people that don't live in cities don't consume, or consume less of, food, water, electricity, furniture and clothing?
> It's also often the case that externalizing those costs adds even more impact as the product has to be shipped in and the waste shipped back out.
They have to be shipped to fewer places and thus save resources. The only way what you are saying makes any sense is either if shipping things to more places somehow save resources or if people that don't live in cities don't need anything shipped.
It may be true from a theoretical viewpoint, but in general cities are richer and consume more.