Compressed air only stores energy
Umm, while the rest of your point is well taken, I'd like to point out that running on compressed air doesn't make a car "clean".
1. Compressed air isn't an energy source, it's just a way to _store_ energy. You need some energy to compress the air, and then get some (but not all) of that energy back when you use it to drive the car.
That energy still has to be produced _somewhere_. If it's produced by burning coal or oil, you just moved the CO2 to the power plant instead of at the car itself.
Basically the compressed energy tank there is nothing more than a fancy battery. And less efficient than a normal battery, too. And I'm too lazy to do the maths, but my instinctive bet would be that it'll likely be a lot bulkier and heavier than a battery.
But the important part is that at the end of the day, like all other feel-good technologies, like electric cars and hydrogen cars, it's just an (inefficient) way to _store_ energy, not to produce it. That car isn't just taking free energy out of the air, it's just using air to store some of the energy driving the compressor.
It _might_ help clean the planet, if you get that energy from nuclear power plants. Unfortunately a heck of a lot of people are against nuclear plants too, and doubly so against having one in their back yard. Funnily enough, it's usually the same eco-activists that rant about electric cars and hydrogen cars as the way of the future, who are against nuclear power too. So effectively their crusade is to... move the CO2 emission from one point to another.
And to tie it to the rest of your point, that's feel-good utility for you. It lets people feel oh-so-green because the CO2 isn't coming out of a pipe at the back of their car. That it comes instead from a big chimney at the power plant, well, they can pretend that doesn't exist, and keep feeling smug about it.
2. It's hardly an example that "significant environmental improvement [...] has not been middle-class activists trying to keep the unwashed masses off their beach resorts, but technological progress spurred by rational economic activity."
In fact, I think you'll find that quite the contrary, rational economic activity left alone has continuously produced more and more pollution. Rational economics said that if it doesn't cost you a dime to dump your noxious fumes in the air or your waste in a river, you'd have to be a dolt to pay for expensive filters. I.e., there wouldn't have been a market or funding for technological progress in that direction.
The only thing that created the conditions for that progress have been, yes, those meddling activists pushing for emission-control legislation. _Then_ a market appeared for those filters and clean technologies, and rational economic activity could take it from there.
The free market is just an optimization mechanism, nothing more. You have some constraints (e.g., availability of manpower and resources) and it helps find a relatively optimal solution point... for those constraints. But, as in all optimization problems, you have to set your constraints to get what you actually wanted out of it. If you don't constrain pollution somehow, the optimal solution it spits out might be to dump waste into a river. That's rational economic activity for you.