Unit 2: Negative externalities associated with the 3 gorges dam

Residents living on the banks of the River Yangtze in China fear their homes will be destroyed due to damage caused by the Three Gorges Dam. according to this BBC clip

< http://www.bbc.co.uk/mediaselector/check/player/nol/newsid_7110000/newsid_7116300?redirect=7116341.stm&news=1&nbwm=1&bbram=1&nbram=1&bbwm=1&asb=1 >

a) Explain, using information from the clip, what sort of market failure the villagers are experiencing
b) What actions can the government undertake to overcome this market failure?