This really hits the nail on the head. The OP cannot change human nature. The most vicious personalities in the business world, currently forced to create value

This really hits the nail on the head. The OP cannot change human nature. The most vicious personalities in the business world, currently forced to create value (except where already able to seek rent from government inefficiency) would instead end up as government leaders in his socialist utopia, creating less value and no less pollution. The answer is simply to capture externalities in a market economy. For example, I wouldn't outlaw smoking, but I would certainly tax the hell out of it to (as precisely as possible) counter-act the effects on nearby people. Same for any type of pollution -- the tax should be exactly what is required to "undo" it. If it cannot be practically undone and it is significantly harmful, then it can be banned outright (such as dumping of certain poisons and toxins into a water supply).