8. China’s economic growth has been powered by an increasing, coal-dominated fossil fuel consumption. The coal production required to match such demand generates both carbon dioxide and all particulate matters, along with arsenic, mercury, chromium and cadmium. This has resulted in extremely high emission levels of carbon dioxide and all particulate matters. The number of annual premature deaths attributable to this pollution is also high in China. Draw a diagram and explain your answers to the following questions:

a. Will these high social costs imply a higher or a lower efficient quantity of coal?

b. If the Chinese government imposes taxes on air pollution, will these high social costs imply a high or low level of the tax required to lead to the efficient level of coal production?