In a perfectly free market system, private companies which excessively pollute have plenty to fear from other private institutions:
-A responsible media can properly inform citizens of the damages industry does (can anyone honestly argue that our media is anything except anti-industry and pro-Greenpeace traitors?). Get rid of government involvement in media and incentive for media to coddle politicians, and watch as the media becomes trustworthy. Media which emasculates itself for the egos of environmentalists will quickly die out in a market system where consumers have the option of the truth.
-Acting as consumers, and given greater amounts of responsibility, citizens can and will refuse to buy products from companies who pollute to the extent that they tangibly damage the environment. Consumers today are idiots and ill-informed because they leave investigations to bureaucrats and politicians. Given that bureaucrats and politicians are inherently alarmist and control-freaks, a citizen is desensitized to legitimate dangers. Get rid of the bureaucrats and politicians, and force citizens to be market savvy. A citizenry which doesn’t make intelligent consumption choices (assuming adequate access to information, which we will have) deserves to be taken advantage of.
-A business which deals with excessive polluters can quickly find themselves at the wrong end of a negative campaign, especially if consumers have true choice and don’t have to deal with government favoritism and government-enforced monopolies.
Thus, a business in a free-market, anti-corporate welfare system has plenty of incentive to self-regulate.
-Even if you take the anti-federalism approach and allow states to set their own regulations, there is still the potential for moonbat liberals to tie the hands of industry. It would be unreasonable to allow Massachusetts to deny industry access to resources just because their citizens are a bunch of Commies.
In summary, environmental regulations are perfectly fine if they are informal and market-based. Formal regulations are never necessary, and are always used to justify needless control of the economy. Overhauling the system to wipe out all formal government regulations would lead to better outcomes for everyone who doesn’t need to rely on government money to make a profit.
You ascribe an awful high level of altruism, attentiveness and concern to people here. Levels those people haven’t earned. There’s no reason to believe people would behave the way you described and every reason to believe they wouldn’t.