Okay realistically, I think this is a good thing at least for defense. The only thing bad about this is that it gives even less incentive to fund NASA, which means that space launches might well walk the way of shipbuilding, where the national agencies responsible for building rockets don't know how to design them anymore.
But regarding the environmental impact, everyone loves to harp and bemoan what future holes deregulation will dig while at the same time complain that we don't have enough manufacturing or rare earth metal refining in this country. But the environmental and human cost is the price you pay for being a manufacturing power. You can't have your cake and eat it too. You can't expect to do anything quickly enough when you've got a telephone books worth of regulations that you need to go through in order to build and launch anything. As a manufacturing powerhouse, China didn't over regulate their factory or mine building to the extent that we regulate ours. It's not surprising that the cost to do business is so high here when it takes years to build and do anything here thanks to all the regulatory paperwork you have to fill out - even if it's just to add a fucking urinal into your shed in the back yard.
If you actually want to increase independence for things like rare earth metals, you'd have to develop the refineries here. If you want to develop better batteries, you have to do cobalt mining. If you want to increase shipbuilding capacity, you need more ship yards and less waterline resorts and vacation homes for Jeff Zuckerberg. If you want affordable drones in the US, maybe the FAA needs to put in a little more effort to develop guidelines for safely operating drones. Similar payoffs apply to everything, including space launches. Regulations do need to be in place, but they shouldn't be so limiting that you can't get anything done anymore. In this country, there are a lot of things that are over regulated, that completely destroyed and hampered industries that could use a little reforming, especially if you actually want to increase manufacture and production.
Besides, space launch isn't something you can offload to a third world country, not to mention how deplorable it is to be imposing the human and environmental cost of any of that upon other countries in the first place....