OK - I'll take a stab at answering your non-hypothetical question. Bear in mind that my grandfather was a coal miner, so I'm well aware that coal dust is pretty nasty stuff, but there really wasn't much of an alternative back in the 1920s when he started.
Put very simply, if people are exposed to toxic pollution from a coal-fired power station, they should be allowed to sue for the damage caused by that pollution, and make it obvious to others wishing to operate such plants that not cleaning up their output will incur costs when they in turn are sued. Not as instant a solution as regulating the hell out of them, but since it hasn't been tried, there's no evidence that it's a less useful solution.
The reason this has not happened is (in my neck of the woods) that the power producers were at one stage nationalised and immune from legal sanction, and are now heavy donors to both main parties so are still immune to legal sanction for all practical purposes.
Another, massive reason why nothing has been done about coal here in the UK is that energy production has moved away from coal, in a short sighted rush to burn all our natural gas, while our nuclear industry has been neglected and allowed to wither away because of the noisy greens who fail to see that the alternatives are unsuitable (coal because it pollutes, natural gas because it will soon run out, wind because it is useless as a base load supply, tidal because some sea birds might move a few miles, and so on).
Oh, and a proper libertarian is only willing to accept artificial scarcity in the form of "intellectual property" if that is strictly limited both in scope and time - I think you'll find that most libertarians tend to agree with Stallman rather than the RIAA or the patent trolls on this matter.