Analyse and evaluate environmental economic issues, e.g. - the private/social costs versus private/social benefits of environmental degradation to determine socially optimal levels of production and/or consumption, in words and diagrammatic forms - government strategies and/or interventions to redress environmental degradation and significant measures to achieve economic and ecological sustainability, e.g. a carbon tax and other fiscal methods to reduce emissions, quotas on resource extraction, and rehabilitation charges.

Using the information in Source 1 and Source 2, analyse how a rehabilitation levy on mining companies could address the environmental costs identified in the data.

A chemical manufacturing firm produces fertiliser that generates water pollution as a by-product. The firm's private cost of production is \$45{,}000\) per week, while the external cost imposed on downstream communities through water treatment and health impacts is \$18{,}000\) per week. The firm's revenue from fertiliser sales is \$72{,}000\) per week, and the social benefit to agricultural productivity is \$68{,}000\) per week. Analyse the difference between the private optimum and the socially optimal outcome in this scenario. Explain one fiscal intervention the government could implement to move production toward the socially optimal level.

A manufacturing industry generates negative production externalities through water pollution. The private marginal cost of production is $45 per unit, while the external cost imposed on downstream users is $18 per unit. The market equilibrium quantity is 12,000 units per month. Ceteris paribus, which policy intervention would most directly achieve the socially optimal level of production?