Most analyses of recent U.S. water quality regulation count little direct benefit from improving human health (Lyon and Farrow 1995; Freeman 2000; USEPA 2000a; Olmstead 2010).29. These estimates are even less positive than the estimates for housing. Optimizing consumers should equate the marginal disutility of pollution to the marginal cost of protection from pollution. For the few governments that do not report when their fiscal year ends, we assume they report by calendar year. Cropper and Oates (1992) describe the Clean Water Act as the only major environmental regulation of the 1970s and 1980s that does not have health as its primary goal. A few pieces of evidence help evaluate the relevance of these issues. One general conclusion from this literature is that the effect of federal grants on local government expenditure substantially exceeds the effect of local income changes on local government expenditure (the latter is typically around 0.10). Dissolved oxygen deficits and the share of waters that are not fishable both decreased almost every year between 1962 and 1990 (FigureII). Swimmable waters must have BOD below 1.5mg/L, dissolved oxygen above 83% saturation (equivalently, dissolved oxygen deficits below 17%), fecal coliforms below 200 MPN/100mL, and TSS below 10mg/L. These estimates divide treatment plants into 10 deciles of the number of housing units in 2000 within 25 miles of downstream river segments. The Clean Air Act is a United States federal law designed to control air pollution on a national level. Iowa State and Center for Agricultural Research and Development. In 1969 Ohio's Cuyahoga River was so fouled by industrial pollution that the river caught on fire. Regressions with linear trend and trend break specifications underscore these findings, subject to the caveats mentioned earlier about the linear approximations and the long post period. Online Appendix E.2 discusses how cost-effectiveness numbers change with alternative estimates of crowding out.22. These estimates are within a standard deviation of one, so fail to reject the hypothesis that the municipal wastewater investment exactly equals the cost listed in the grant project data.20. As in most event study analyses, only a subset of event study indicators are observed for all grants. Municipal spending data from Annual Survey of Governments and Census of Governments. With mounting public demand, Congress passed what remains one of the most popular and effective environmental laws our nation has ever had, the Clean Water Act. Letting States Do the Dirty Work: State Responsibility for Federal Environmental Regulation, Transboundary Spillovers and Decentralization of Environmental Policies, Water-Quality Trends in the Nations Rivers. A blueprint for clean water everywhere, for everyone Graphs show coefficients on downstream times year-since-grant indicators from regressions which correspond to the specification of TableII. Notes. The tables separately list the different components of costs, and Section VII.C discusses possible effects of these costs on local taxes or fees. Engineering calculations in USEPA (2000c) suggest that the efficiency with which treatment plants removed pollution grew faster in the 1960s than in the 1980s or 1990s. All You Need to Know About The Clean Water Act & Its Amendments 1974 Report to the Congress. The decline in mercury is noteworthy given the recent controversy of the Mercury and Air Toxics Standards (MATS) policy that would regulate mercury from coal-fired power plants. Why farmers and ranchers think the EPA Clean Water Rule goes too far - PBS 2013). Graphs show coefficients on year-since-grant indicators from regressions corresponding to the specification of TableV, columns (2) and (4). Clean Water Act Cons. We now discuss six reasons the ratios of measured benefits to costs from the previous subsection may provide a lower bound on the true benefit/cost ratio. Clean Air Act Essays | ipl.org But because residents who live upstream of treatment plants can benefit from clean water downstream of treatment plants (e.g., by traveling for recreation), upstream homes could benefit from grants. Other water pollution research generally specifies BOD and TSS in levels; practices vary for fecal coliforms. "Clean Water Act" became the Act's common name with amendments in 1972. Agricultural Sediment Control, Environmental Regulations, Air and Water Pollution, and Infant Mortality in India. These studies ask: The top decile of counties includes ratios between 0.31 and 0.41. Because water pollution flows in a known direction, areas upstream of a treatment plant provide a natural counterfactual for areas downstream of a plant. But Supreme Court decisions in 2001 and 2006 threw protections into question for 60 percent of our nation's streams and millions of acres of wetlands. Share sensitive information only on official, secure websites. The wastewater treatment plants that are the focus of this article also receive effluent permits through the NPDES program, so our analysis of grants may also reflect NPDES permits distributed to wastewater treatment plants. The health of many aquatic species (so indirectly, the benefit people derive from a river) may depend nonlinearly on the area of clean water. Standard errors are clustered by watershed. Clean Water Act Pros And Cons - 1085 Words | Cram Online Appendix TableVI shows a variety of sensitivity analyses, and Online Appendix E.2 discusses each. Point sources are discrete conveyances such as pipes or man-made ditches. The National Survey of Recreation and the Environment and its predecessor, the National Recreation Survey, do not systematically summarize trips taken and travel distances. First, the analysis is based on only 198 cities. Air is typically unfiltered when it is inhaled, so air pollution is believed to have large mortality consequences that account for much of the benefits of air pollution regulation. Brackets show 95% confidence intervals. Current policy debates center on the uncertainty around wetland benefits. Most of these estimates are small and actually negative. The gradual effect of the grants is unsurprising since, as mentioned earlier, the EPA estimates that it took 2 to 10 years after a grant was received for construction to finish. The main regression sample includes only a balanced panel of tracts that appear in all four censuses between 1970 and 2000; imputing values for missing homes hardly changes the ratio in column (4). The only econometric analysis we know of such policies tests how the French policy of jointly taxing industrial air pollution and subsidizing abatement technologies affected emissions, using data from 226 plants (Millock and Nauges 2006). The ultimate entity responsible for local capital costs and operation and maintenance costs is ambiguous because local governments may receive other payments from state or federal governments to help cover these costs. Finally, we note one similarity between air and water pollution that may be relevant to policy design. We estimate many sensitivity analyses, including restricting to high-quality subsamples of the data, adding important controls, weighting by population, and many others. Reasons We Need the Clean Water Rule | whitehouse.gov (1972) The Clean Water Act (CWA) establishes the basic structure for regulating discharges of pollutants into the waters of the United States and regulating quality standards for surface waters. The 1972 U.S. Clean Water Act sought "to restore and maintain the chemical, physical, and biological integrity of the Nation's waters." This article quantifies changes in water pollution since before 1972, studies the causes of any changes, and analyzes the welfare consequences of any changes. Pros of legalism are There were much fewer crimes in china and the laws. The Clean Water Act targets industry by focusing on the chemical aspects of polluted water. The Clean Air Act: Successes and Challenges Since 1970 These controls could help address possible omitted variables bias due to city growth in these difference-in-differences regressions, but are potentially a case of bad controls (Angrist and Pischke 2009) because they could be affected by grants. This implies that the marginal implicit price of an amenity at a given point on the hedonic price schedule equals the marginal willingness to pay of the consumer who locates on that point of the hedonic price schedule. Search for other works by this author on: University of California, Berkeley and National Bureau of Economic Research. Our estimated ratio of the change in housing costs to total grant costs may provide a lower bound on the true benefit/cost ratio of this grant program because we abstract from nonuse (existence) values, general equilibrium effects, potential changes in sewer fees, and the roughly 5% longest recreational trips. Hines (1967) describes state and local control of water pollution in the 1960s, which typically included legislation designating regulated waters and water quality standards, a state pollution control board, and enforcement powers against polluters including fines and incarceration. Municipal and grant costs are cumulative since 1970. When Subsidies for Pollution Abatement Increase Total Emissions, Water Quality and Economics: Willingness to Pay, Efficiency, Cost-effectiveness, and New Research Frontiers, Handbook on the Economics of Natural Resources, Evidence of the Effects of Water Quality on Residential Land Prices, Decentralization and Pollution Spillovers: Evidence from the Re-drawing of County Borders in Brazil, Taxation with Representation: Intergovernmental Grants in a Plebiscite Democracy, An Economic Analysis of Clean Water Act Issues, Contingent Valuation of Environmental Goods, A Symphonic Approach to Water Management: The Quest for New Models of Watershed Governance, Ex Post Evaluation of an Earmarked Tax on Air Pollution, Microeconometric Strategies for Dealing with Unobservables and Endogenous Variables in Recreation Demand Models, The Housing Market Impacts of Shale Gas Development, Efficient Pollution Regulation: Getting the Prices Right, Environmental Accounting for Pollution in the United States Economy, Handling Unobserved Site Characteristics in Random Utility Models of Recreational Demand, Presidential Veto Message: Nixon Vetoes Water Pollution Act, Review of Environmental Economics & Policy, Shale Gas Development Impacts on Surface Water Quality in Pennsylvania, Homeownership Returns, Tenure Choice and Inflation, Objective versus Subjective Measures of Water Clarity in Hedonic Property Value Models, Building a National Water Quality Monitoring Program, Why Is Pollution from U.S. Manufacturing Declining? Online Appendix TableIII shows these results and Online Appendix E.1 explains each. Focus on balancing cost and health . For full access to this pdf, sign in to an existing account, or purchase an annual subscription. Standard errors are clustered by watershed. Notes. In the presence of such general equilibrium changes, our estimates could be interpreted as a lower bound on willingness to pay (Banzhaf 2015). The hedonic price schedule provides information about willingness to pay for amenity j because it reflects the points of tangency between consumer bid curves and firm offer curves. One is to estimate hedonic regressions excluding housing units in the same city as the wastewater treatment plant. The Clean Water Act Flashcards | Quizlet The curve 2 describes the bid function for another type of consumer. The cost-effectiveness is defined as the annual public expenditure required to decrease dissolved oxygen deficits in a river-mile by 10 percentage points or to make a river-mile fishable. 33 U.S.C. \end{equation}, \begin{equation*} One such channel involves substitutioncleaning up part of a river in an area with many dirty rivers might have different value than cleaning up a river in an area with many clean rivers. Surface waters, by contrast, are typically filtered through a drinking water treatment plant before people drink them. The Office of Water (OW) ensures drinking water is safe, and restores and maintains oceans, watersheds, and their aquatic ecosystems to protect human health, support economic and recreational activities, and provide healthy habitat for fish, plants, and wildlife. The point estimate implies that each grant decreases TSS by 1%, though this is imprecise. We find some evidence that the net benefits of Clean Water Act grants vary over space in tandem with population density and the popularity of water-based recreation. A second general equilibrium channel is that the hedonic price function may have shifted. GLS estimates the effect for the average pollution reading rather than for the average plant downstream year. saturation increase/10, 7. Second, this city-level difference-in-differences estimate cannot use the upstream-downstream comparison for identification. Misperception would be less important if most benefits of surface water quality accrue through recreation or aesthetics, since failing to perceive water pollution through any means would mean its effects on recreational demand are limited. One possible channel is that wages change to reflect the improvement in amenities (Roback 1982). One involves declining returns to abatement of pollution from point sources. At the same time, much oxygen-demanding pollution comes from agriculture and other nonpoint sources, and those sources have remained largely unregulated. But if local governments ultimately pay these costs, they could depress home values. Journal of the Association of Environmental and Resource Economists, Environmental Policy Choice: Pollution Abatement Subsidies, Water Pollution Policy. Our topic is clean water and sanitation. Primary focus: Establish cooperation between feds and states. The grants we study actually subsidize the adoption of pollution control equipment, which is a common policy that has undergone little empirical economic analysis. Resources for the Future, Public Policies for Environmental Protection, The Impact of Intergovernmental Fiscal Transfers: A Synthesis of the Conceptual and Empirical Literature, Intergovernmental Fiscal Transfers: Principles and Practice, Analysis of National Water Pollution Control Policies: 2. A fourth question involves health. These confidence regions do not reject the hypothesis that the ratio of the change in home values to the grants costs is zero but do reject the hypothesis that the change in home values equals the grants costs. Foremost is the requirement in section 303 that states establish ambient water quality standards for water bodies, consisting of the designated use or uses of a Each of the four pollutants which are part of these fishable and swimmable definitions declined rapidly during this period. We considered a fourth repository, the Sustaining the Earths Watersheds: Agricultural Research Data System (STEWARDS), managed by the USDA. Online Appendix FigureVII illustrates. The Clean Water Act of 1977 was an important and controversial environmental regulation the United States Congress had passed. The Clean Water Act, by contrast, mostly ignores nonpoint pollution sources like agriculture. Data include years 19622001. Abstract. The graphs show no obvious evidence of a mean shift or trend break in water pollution around 1972. Row 4 is calculated following the method described in Online Appendix B.4. Panel B includes the local copayment, and finds pass-through rates of 0.84 to 0.93 in real terms or 1.09 in nominal terms. The U.S. Environmental Protection Agency (EPA) and the U.S. Army Corps of Engineers (Corps) final " Clean Water Rule " issued on Wednesday reduces the agencies' jurisdiction to protect waters that have been covered under the Clean Water Act (CWA) since the 1970s. A city may spend a grant in years after it is received, so real pass-through may be lower than nominal pass-through. The Dirty 31: Is Your State Arguing Against Clean Water? This implies that pollution levels in upstream and downstream waters had similar trends before grants were received. Adler Robert W., Landman Jessica C., Cameron Diane M.. Angrist Joshua D., Pischke Jrn-Steffen, Artell Janne, Ahtiainen Heini, Pouta Eija, , Boscoe Francis P., Henry Kevin A., Zdeb Michael S., , Carson Richard T., Mitchell Robert Cameron, , Currie Janet, Zivin Joshua Graff, Meckel Katherine, Neidell Matthew, Schlenker Wolfram, , Deschenes Olivier, Greenstone Michael, Shapiro Joseph S., , Faulkner H., Green A., Pellaumail K., Weaver T., , Gianessi Leonard P., Peskin Henry M., , Jeon Yongsik, Herriges Joseph A., Kling Catherine L., Downing John, , Kahn Matthew E., Li Pei, Zhao Kaxuan, , Keiser David A., Kling Catherine L., Shapiro Joseph S., , Kling Catherine L., Phaneuf Daniel J., Zhao Jinhua, , Leggett Christopher G., Bockstael Nancy E., , Lipscomb Molly, Mobarak Ahmed Mushfiq, , Muehlenbachs Lucija, Spiller Elisheba, Timmins Christopher, , Muller Nicholas Z., Mendelsohn Robert, , Muller Nicholas Z., Mendelsohn Robert, Nordhaus William, , Olmstead Sheila M., Muehlenbachs Lucija A., Shih Jhih-Shyang, Chu Ziyan, Krupnick Alan J., , Peiser Richard B., Smith Lawrence B., , Poor P. Joan, Boyle Kevin J., Taylor Laura O., Bouchard Roy, , Smith Richard A., Alexander Richard B., Wolman M. Gordon, , Smith V. Kerry, Wolloh Carlos Valcarcel, , Steinwender Astrid, Gundacker Caludia, Wittmann Karl J., , Wu Junjie, Adams Richard M., Kling Catherine L., Tanaka Katsuya, , Oxford University Press is a department of the University of Oxford. A few points are worth noting. Annual cost to make a river-mile fishable, 8. These values are similar without survey weights, or when excluding outlier reported travel distances (above 150 miles). We emphasize a few caveats in interpreting TableIV. Implemented in response to growing public awareness and concern for controlling water pollution in the U.S., the Clean Water Act followed the establishment of the Environmental Protection Agency (EPA) and the passage of the Clean Air Act in 1970, and preceded the Endangered Species Act of 1973, making it part of a period of landmark . Land Rents, Local Productivity, and the Total Value of Amenities, Watersheds in Child Mortality: The Role of Effective Water and Sewerage Infrastructure, 1880 to 1920, Failure to Act: The Economic Impact of Current Investment Trends in Water and Wastewater Treatment Infrastructure, Mostly Harmless Econometrics: An Empiricists Companion, Subjective vs. WHAT'S AT STAKE? The Author(s) 2018. Dollar values in |${\$}$|2014 millions. \end{equation}. It is interesting to consider possible explanations for these slowing trends. Two studies report that concrete structures of treatment plants are expected to have a useful life of 50years, but mechanical and electrical components have a useful life of 1525years (USEPA 2002, 11; American Society of Civil Engineers 2011, 15). It remains one of our nation's most vital safeguards for the health and safety of our communities and our environment. Published by Oxford University Press on behalf of the President and Fellows of Harvard College. Finally, we can recalculate the ratios in TableVI considering only subsets of costs. TableIV reports estimates corresponding to equation (5). We convert the data to calendar years using data from these surveys on the month when each governments fiscal year ends, assuming that government expenditure is evenly distributed across months. \end{equation*}. 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