I take issue with your proposed solution. First of all, your solution is only addressing local effects, and requires the neighbor to be intelligent and knowledgeable with regard to the effects. Furthermore, your thinking is too local and short term. This only supports my theory that long term ecological management is neither something libertarians are concerned about, nor even aware of.
I have offered you the chance to educate yourself on these matters by recommending reading material. Are you earnestly interested, or would you rather restrain your existing knowledge on these subjects - subscribing to the theory that what you don't know won't hurt your ideas?
Not having any imagination of my own, but something more rudimentary, I propose the following: If I suspected my neighbor was emitting foul substances, or I watched the tele' and I saw somebody I thought had some knowledge in said emissions, I then do one of two things. First, I educate myself. If it is determined that my understanding is clear and evident that said emissions cause harm, I bring charges against my neighbor.
Alternatively, if I don't want to educate myself, I call the pollution expert over to my place and have him do a proper investigation. If there is anything of merit, then we sue, if not, we don't.
I lied. There's a third option. I rally all of my neighbors, both far and wide. We do a long term analysis with global reach, investigating every plausible scenario and combination of interaction. If it can be determined with some degree of accuracy that the pollution did me harm, I sue for damages for that part of that contribution my neighbor made to the overall pollution of my environment. I then assist those neighbors who have experienced the same issues, and then ask them to sue, or they allow me to sue on their behalf. A class action lawsuit could work here. Rinse and repeat.
See how long the polluter stays in business if he doesn't change his ways. Of course, everybody emits some amount of pollution to some effect upon his neighbors, so now everybody's a target.
This is about to get very interesting... Of course, I haven't much of an imagination, so maybe you could help me out with that...?