Free markets are great, but they will create a society that is not desirable if some principles aren't kept in place. One principle is not being allowed to steal from people. If one can steal items without consequence, it's an efficient, low cost way to get them. But thefts messes up good business. Even a relatively free and capitalist society usual has some publicly funded police in place to stop theft.
Environmental destruction is a form of theft or property destruction. We split the earth up into geographic regions, but these divisions are arbitrary. The ecosystem, the air, and the water are interlinked. There's a network of interactions between them that stretches over the earth like a web. When components are removed, the effects are often felt in other places. Here's an extreme example to make a point: one person sets off a bomb that causes nuclear winter and kills off most of the large mammals on earth including most humans. Here's a less extreme example: an industrialized nation pumps enough carbon dioxide into the atmosphere to change the climate where poor people live in Africa, altering to less livable conditions. It's roughly equivalent to going to Africa and damaging the people property, but the law doesn't take that into account. In order to pump carbon dioxide into the atmosphere, companies should be obligated to pay for the consequences on the network of interactions that forms the global system of "life." The typical free market system is that entities have to pay for land, not pay for the chunk of the global network of life that they are affecting.
All this said, it really makes sense for government to step in with environmental issues. They are roughly equivalent to theft or property damage.
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