Industry improves lives (energy, electricity, transportation), but when it pollutes the air (clean air being a prerequisite for preservation of human life) it also decreases the quality of life in other ways.
In "Return of the Primitive: The Anti-Industrial Revolution", Ayn Rand wrote:
"If a man creates a physical danger or harm to others, which extends beyond the line of his own property, such as unsanitary conditions or even loud noise, and if this is proved, the law can and does hold him responsible. If the condition is collective, such as in an overcrowded city, appropriate and objective laws can be defined, protecting the rights of all those involved…But such laws cannot demand the impossible, must not be aimed at a single scapegoat, i.e., the industrialists, and must take into consideration the whole context of the problem, i.e., the absolute necessity of the continued existence of industry—if the preservation of human life is the standard.”
If the “preservation of human life is the standard”, shouldn’t the quality of a fundamental requirement of human life (clean air) at least be as important as the “continued existence of industry”? For a collective industry to be more important would be to sacrifice the individual to it. Smog “extends beyond the line” of private property and is a “collective condition” that affects everyone in a city so what would “objective and appropriate laws to protect the rights of all involved from a collective condition” (such as pollution) be?
If objectivists stand up and defend the positives of industry, do they do so at the expense of being completely silent about and ignoring the negatives? Is the necessity of clean air for all humans to live less important than the existence of industry which pollutes it to provide a value? Is breathing healthy air not a value of life?
In addition to Ayn Rand's many detailed comments in ROP, the Objectivist view of pollution is also succinctly stated by Leonard Peikoff in OPAR, pp. 408-409:
All the objections raised against capitalism depend on the above kind of epistemology [dispensing with principles, remaining concrete-bound, "disintegration" in DIM terms]. And as in the issue of monopolies, all the evils widely ascribed to capitalism flow not from capitalism, but from its opposite. This includes such evils as depressions, child labor, racism, adulterated food and drugs, pollution, war, and pornography. [Each of these is discussed further...] Pollution is a minor side effect of industrialization, one that only an unfettered industry has the financial and technological means to clean up.
Refer also to the topics of "Pollution" and "Ecology/Environmental Movement" in The Ayn Rand Lexicon.
...what would “objective and appropriate laws to protect the rights of all involved from a collective condition” (such as pollution) be?
Ayn Rand indicated her answer in the very passage quoted in the question, and in some additional excerpts included in the Lexicon topic of "Pollution":
The word "pollution" implies health hazards, such as smog or dirty waters.
In other words, the proper procedure for determining how to clean up pollution involves the following key points:
If objectivists stand up and defend the positives of industry, do they do so at the expense of being completely silent about and ignoring the negatives?
Historically, business and industry have been under relentless siege for a long time from philosophical enemies seeking to destroy them. Pollution is only one of many convenient excuses for ever more crushing restrictions and burdens, as part of the larger historical process of bringing what still remains of the freedom of production and trade to a complete halt. The top priority ought to be, first and foremost, to increase the freedom of production and trade, not to continue to undermine it through ever more stifling regulations and requirements.
Update: Applied Philosophy
From a comment:
I'm struggling to think of a law that would help clean up any pollution caused by rapid production and industrialization in an unfettered capitalist society.
Does this mean that it is a "given" that there allegedly ought to be new laws to "clean up pollution" and that it's hard to envision how such laws could do it -- or does it mean that it probably can't be done by any new laws at all? The next sentence seems to suggest the latter interpretation:
It [law] certainly cannot impede the growth of production and trade, for that would be an infringement in individual rights.
Again, this illustrates Ayn Rand's observation that "actual pollution ... is primarily a scientific, not a political, problem."
Note the term "primarily." In the full excerpt, Ayn Rand also explains that there is a valid role for law in protecting individual rights, as the commenter acknowledges. To identify exactly what kind of law would be appropriate, Ayn Rand mentions the specific examples of "oil rights, air-space rights, etc." Observant readers may notice that the version of Ayn Rand's statement quoted in the original question omitted these examples, replacing them with an ellipsis ("..."). The unedited version can be found in the Lexicon topic of "Pollution."
Here is another specific example cited by Ayn Rand in her article on "The Anti-Industrial Revolution" (in ROP, p. 283):
As far as the role of government is concerned, there are laws—some of them passed in the nineteenth century—prohibiting certain kinds of pollution, such as the dumping of industrial wastes into rivers. These laws have not been enforced. It is the enforcement of such laws that those concerned with the issue may properly demand. Specific laws—forbidding specifically defined and proved harm, physical harm, to persons or property—are the only solution to problems of this kind. But it is not solutions that the leftists are seeking, it is controls.
"Unfettered capitalism" does not mean complete freedom to do whatever one wishes without regard for the rights of others. Of any action that anyone might be tempted to perform, citizens of a laissez-faire capitalist society can learn to ask themselves:
But "pollution" still needs to be objectively defined and considered in the full context of all the values involved; expecting to live in a world of literally zero pollution is unrealistic unless or until it gradually becomes increasingly feasible technologically and economically.
Update: Full Context
From a comment by the questioner:
The "answer" above is essentially, "Pollution needs to be objectively defined." That's it.
There is far more than that to the Objectivist perspective on pollution. I've tried to indicate a more complete outline of it in my answer. For those who may want to dig deeper, I heartily recommend reading ROP in its entirety. I believe the two most important points are:
Specific laws—forbidding specifically defined and proved harm, physical harm, to persons or property—are the only solution to [pollution] problems of this kind. But it is not solutions that the leftists are seeking, it is controls. [I.e., they want controls first and foremost; pollution issues are just a convenient facilitator, among many.]
... actual pollution ... is primarily a scientific, not a political, problem. [Just try cleaning it up without technology, and try inventing cleaner industry and technology without having had earlier, more primitive industry and technology to build upon.]
(Note also the Objectivist identification that all knowledge is contextual. It is gained by looking at reality and integrating what one observes in a non-contradictory manner. This, in turn, is an aspect of the Objectivist view of reason and logic -- "Reason is the faculty that identifies and integrates the material provided by man's senses," and logic is "the art [as in artisan, skill, or process] of non-contradictory identification.")
Update: Establishing Original Ownership
From two separate comments by another commenter:
Industry in history has been content to pollute "common land" and "common water". I suppose in some Objectivist world, there would be less "common land" and thus the pollution would yield immediate legal repercussions.
These comments raise the question of how original ownership of natural resources (such as land) would be established under laissez-faire capitalism. Can anyone go into an unowned "wilderness area" and do whatever he wants with it (short of violating the individual rights of others) and claim ownership of whatever he wants?
Ayn Rand addressed this topic in her article, "The Property Status of Airwaves" in CUI, Chap. 10. I have already posted a detailed discussion of this article in the past (link). One additional point worth emphasizing in the present Answer is the following:
[T]he government, in this case  was acting not as the owner but as the custodian of ownerless resources who defines objectively impartial rules by which potential owners may acquire them. [CUI p. 123]
This is what I had in mind in the formulation: "Am I polluting land that doesn't belong to anyone? If it's not my land, I shouldn't do it." If it is then asked how someone will be prevented from doing it anyway, the answer is: by the government, acting as custodian of the ownerless resource.
It might also be asked what would happen if the issue concerns resources that are not within the jurisdiction of any government, such as the high seas ("international waters"). In that case, some type of treaty between neighboring nations probably would be the only possible means, although a capitalist government potentially could still exercise restraints over its own citizens in sufficiently egregious cases, even when the citizens aren't acting within the territorial boundaries of their own country. Exercising dominion and control of any kind over a resource that is not one's own can be proscribed by government-as-custodian even if no one else has yet acquired official ownership of that resource.
One can point to history, of course, and bemoan the fact that it often hasn't worked that way in the past, but philosophy concerns what ought to have been, and ought to be.