Distilled down to its essence a free market grants you protection from involuntary transactions and access to voluntary transactions. Externalities are involuntary transactions, from a free market perspective they aren't any different from robbery or the dreaded... taxes.

However, taxes are collected by the government that our population has voted in (in democratic nations). This is also why we prefer government monopolies over private monopolies, because we have a degree of control, we get to choose.

The only dilemma is that the choice of government is on a societal level, individuals may not get what they voted for. However, there is no good solution to this problem and the search for a solution will only stop after the end of humanity.