The free market will NOT solve this problem because it labels damage to public goods (ie. pollution of atmosphere, water, land, etc) as EXTERNALITIES - that is, "external" to the economy. Of course, this is a misnomer since our economies are entirely reliant on the resources and ecosystem processes generated by a healthy environment. It is the role of govts to regulate and in doing so "internalise" the externalities, make the polluters pay for their pollution. This in turn leads either to polluters reducing their pollution (which generally increases the market price of said commodity) and/or consumers using price signals to switch to other comparable technologies.
eg. coal-fired electricity in Aust. currently comes at about $35-40/MWh because producers do not have to pay for the air pollution, fine particulate pollution and environmental degredation of mine sites. If this were all factored into the cost of the electricity it would be $70-80/MWh. At that price range, renewables suddenly become viable as solar thermal and wind power cost about $70-80/MWh, and with emerging sliver cell technology, solar pv will soon be at or below that price.
Be careful with the terminology you use because the neo-con economists will denounce and rip you to shreds if you can't discuss this stuff at their level.
