Case Scenario: A coal mine in South Africa has undertaken to export coal to the Netherlands. Coal mining imposes many external costs on its surroundings and the people who live in it. Coal mining is by nature disturbing and destructive of the environment. Open cast mining removes large volumes of soil and rock overburden to get to the workable coal seams, and destroys regional aquifers. Mining produces large mountains of solid waste. Coal heaps are prone to spontaneous combustion, and thus air pollution. Leakage from waste heaps are acidic, adding to the general and large-scale acid mine drainage impact and interferes with underground and surface water (water pollution). Mining also has serious social consequences: on the movement of people, on people's health and the environments they live in. To placate the local community, the coal mine built a mining school in the same location to train the locals on advance mining techniques. To date this school has help trained 2 generations of miners for this mine and others in the region.
1. Evaluate the policy of taxation in reducing the level of coal-mining to socially optimal levels.
2. Are there command and control policy/policies available to government to solve this problem of pollution? Elaborate on this method. Explain their key strengths and weaknesses.