In our brief study of market failure we arrived at government intervention as a general solution. Because the market fails to produce the outcome that is best for society on its own, some form of "regulation" of the market is necessary to achieve the socially efficient result.
The imposition of performance standards or technology standards, Pigouvian taxes on negative externalities, the establishment and enforcement of property rights ala Coase, and administration of tradable permit systems (cap & trade) are all examples of regulation.
Importantly, in cases of market failure, regulation is intended to promote economic efficiency - making the size of the "economic pie" larger allows everyone to have a larger slice (at least in theory). Yet "regulation" is often considered a dirty word, and associated with less economic growth. "Deregulation" likewise is often viewed as promoting efficiency. Clearly, there's an argument to be made from both sides of this messy issue, and the realized outcome likely depends on the source and nature of the market failure and government's ability to correct it.
In light of notable recent events, Steven Pearlstein of the Washington Post calls for consideration of not only the costs of regulation, but also the benefits in terms of protecting the public interest and productive natural capital. This is obviously a controversial issue, but this article makes for an interesting read.