The question is a restatement of the classic example of the Tragedy of the Commons. In this case, the commons is the atmosphere. It costs an individual or a corporation nothing to dump whatever they like into the atmosphere.
The free market answer would be to refuse to treat the atmosphere as a commons. Lots of things that have traditionally been regarded as commons that anyone could exploit if they had the inclination have been enclosed.
The trouble is that it’s really had to portion out the atmosphere, because it doesn’t stay put. So if we say that no one has the right to emit into anyone else’s atmosphere, that means no one has the right to emit anything, because you can’t keep your CO2 and O2 and H20 and smoke and CFCs and tetra-ethyl lead on your side of the property line, it invariably seeps over onto my side of the property line.
So it’s easy to imagine a free market regime that says anyone has the right to emit as much lead as they like on their private property, but since they don’t have the right to emit lead onto anyone else’s property, they effectively don’t have the right to emit lead at all. Just like, while anyone might have the right to fire a gun on their private property, they don’t have the right to send bullets flying into their neighbor’s property. This means that if you live in an apartment instead of on a farm, you effectively don’t have the right to shoot your gun in your apartment.
But then the question is, what is the effective penalty for emitting lead…either in bullet form, or in tetraethyl form? Even if I declare you don’t have the right to shoot your gun from your property into my property, what are my remedies if you do this? If you shoot your gun into my property, but it doesn’t cause any actual damage, then I can’t sue you for damages, because I have to be damaged. If you shoot your gun and destroy my precious antique cans, then I can sue you for the loss of my cans, but if the bullet just hits the dirt and doesn’t destroy anything, then what’s the penalty? Pain and suffering? Mental anguish? And if I can’t prove that your lead emissions caused me brain damage, what are my damages? And who do I sue…the driver who drives a car powered with leaded gas, the gas station, the oil companies?
So since we don’t want to have to have a situation where I can’t do anything about you shooting your gun into my property untill you hit something or someone with it, we have to have a regulatory scheme. That is, it’s a crime to shoot your gun in such and such circumstances.
Thing is, everyone acts like a “free market” must be devoid of government interference. But the truth is that without the rule of law there can be no free market. With no law, Gakh the Strong can just club Hoojah the Clever One on the head and take his beads and shells. We have to have the “no clubbing” rule before a free market can exist, and the no clubbing rule has to be enforceable. And we have to have enforceable contracts, we have to have functioning courts.
So a free market without government intervention can’t exist…“government” broadly interpreted, it could just mean social custom so strong that it has the force of law.
This is why the imaginary corporate ruled dystopia makes no sense. If Bill Gates can simply send goons to your house and take whatever he likes, he’s not a capitalist but a feudalist. If he can send goons to your house and force you to work for him or they’ll shoot you, he’s not a capitalist but a slaveowner. It’s possible to imagine a future where capitalist fatcats have used the power of their wealth to transform themselves into feudal overlords, but that isn’t rule by corporation. Why would such a feudal overlord continue to produce products and advertise them and convince people to buy them, and pay people wages and so on? Why not just take whatever you like, and if they don’t like it, shoot them?