How can state regulation ever be considered necessary? A state regulation is nothing but an edict issued by men with guns who threaten to initiate violence against provably innocent people for provably innocent acts. Think about that for a minute. Try to cite an example of state regulation being enforced which is not an initiation of violence against an otherwise innocent person. Regulation is not like a law against murder or a law against theft where the violation of person or property is addressed. It is an attempt to criminalize various aspects of otherwise peaceful, voluntary, non-aggressive human intercourse (i.e., freedom). It is done in the name "preventing crime," and that is why the concept is so Orwellian. It totally perverts the concept of law. It actually manages to criminalize freedom while simultaneously legitimizing organized crime (the armies of state thugs who punish innocent people for various non-crimes).

Air pollution is a simple matter of enforcing property rights. Read Rothbard on the subject. And I'm pretty sure that if you investigate the matter, you'll find that the rules for air traffic were developed by the pioneers of the industry long before government got involved. The state is always a latecomer to these things, and usually steps in so that politicians can grandstand and gain more power for themselves and their cronies. There is plenty that has been written about market solutions to perceived public goods problems like air quality, air traffic control, the radio spectrum, etc. If you apply the homesteading principle properly, then it's fairly easy to work out the property rights of those involved in a dispute.