Captialism (as implemented in many Western countries) can deal with these things, it just doesn't by default. We successfully solved ozone depletion, we made significant progress with acid rain, we got rid of leaded gasoline, our rivers are reasonably clean, ...

Reasonable legislation that sets the right incentives works. But it's difficult to get passed when entrenched interests are against it. The problem isn't capitalism, the problem is the industry influence on politics that prevents reasonable legislation.