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Producer surplus is equivalent to profit without the fixed cost (e.g., monthly lease payments that don't change with output).
Unfortunately, production of Q generates some harmful side (i.e., external) effects such as fewer healthy days, fewer recreation opportunities, etc: marginal external cost = MEC. If these costs are constant then the full costs to society of production of Q is the marginal social cost curve: MSC = MPC + MEC. The external costs of Q1 are equal to area c + d + e + f + g + h. (Nothing in the conclusions changes if the MEC is increasing in Q0.
Environmental regulation is designed to get firms to "internalize the externality" by considering the external costs of production...
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