Before The Clean Water Act. \end{equation}, \begin{equation*} These values are similar without survey weights, or when excluding outlier reported travel distances (above 150 miles). Third, these grants could lead to increased city taxes, sewer fees, or other local costs that depress home values. Column (2) uses real dollars. Row 5 is calculated by multiplying each grant by the parameter estimate in Online Appendix TableVI, row 13, column (2), and applying the result to all waters within 25 miles downstream of the treatment plant. Beginning in 1977, grants provided a higher 85% subsidy to projects using innovative technology, such as those sending waste-water through constructed wetlands for treatment. Alternatively, the most distant travelers might be marginal. River miles * pct. We report both the double-difference and triple-difference estimators for both outcomes, and obtain qualitatively similar conclusions. Electricity-generating units and other sources do contribute to thermal pollution in rivers, but increasing temperature is an outlier from decreasing trends in most other water pollutants. In total over the period 19722001, the share of waters that are not fishable and the share not swimmable fell by 11 to 12 percentage points. Propensity score for appearing in the balanced panel of cities is estimated as a function of log city population, log city total municipal expenditure, city type (municipality or township), and census division fixed effects, where city population and expenditure are averaged over all years of the data. Clear protections mean cleaner water. Data cover decennial census years 19702000. The annual cost to make a river-mile fishable ranges from |${\$}$|1.5 to |${\$}$|1.9 million.19, Cost-Effectiveness of Clean Water Act Grants (|${\$}$|2014 MN). Finally, we note one similarity between air and water pollution that may be relevant to policy design. We thank the editor, Larry Katz, along with four referees, Joe Altonji, Josh Angrist, David Autor, Richard Carson, Lucas Davis, Esther Duflo, Eli Fenichel, Michael Greenstone, Catherine Kling, Arik Levinson, Matt Kotchen, Amanda Kowalski, Rose Kwok, Drew Laughland, Neal Mahone, Enrico Moretti, Bill Nordhaus, Sheila Olmstead, Jordan Peccia, Nick Ryan, Daniel Sheehan, Kerry Smith, Richard Smith, Rich Sweeney, Reed Walker, and participants in many seminars for excellent comments; Randy Becker, Olivier Deschenes, Michael Greenstone, and Jon Harcum for sharing data; Elyse Adamic, Todd Campbell, Adrian Fernandez, Ryan Manucha, Xianjun Qiu, Patrick Reed, Vivek Sampathkumar, Daisy Sun, Trevor Williams, and Katherine Wong for excellent research assistance; and Bob Bastian and Andy Stoddard for explaining details of the Clean Water Act. Panels A and B reflect the classic hedonic model, with fixed housing stock. For full access to this pdf, sign in to an existing account, or purchase an annual subscription. Notes. PDF Clean Water Act and Pollutant Total Maximum Daily Loads (TMDLs) Some nutrients like ammonia and phosphorus are declining, while others like nitrates are unchanged. Row 12 of Online Appendix TableVIII reports this specification and finds similar and if anything slightly less positive change in home values than the main results estimate, which is the opposite of what one would expect if city taxes, sewer fees, or other local costs depressed home values. 7 things to know about the Clean Water Act after 50 years The federal government paid 75% of the capital cost for most construction projects awarded through September 1984, and 55% thereafter; local governments paid the rest of the capital costs. We impute these values from a panel regression of log mean home values on year fixed effects and tract fixed effects. 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. WHAT'S AT STAKE? Clean Water Act Cons - 679 Words | Bartleby Municipal and grant costs are cumulative since 1970. 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. TableII shows that these grants cause large and statistically significant decreases in pollution. The analysis includes plants that never received a grant (which have all event study indicators 1[Gp,y = 1] equal to 0), plants that received a single grant (which in any observation have only a single event indicator equal to 1), and plants that received more than one grant (which in any observation can have several event indicators equal to 1). Summary of the Clean Water Act | US EPA Effects of Clean Water Act Grants on Housing Demand. Column (3) include all homes within 1 mile, and column (4) includes homes within 25 miles. Consequences of the Clean Water Act and the Demand for Water Quality That study does not separately identify the effect of the pollution tax from the effect of the abatement subsidy. 5 Things To Know About NY's Clean Water, Air, And Green Jobs Bond Act 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. As mentioned in the introduction, other recent analyses estimate benefits of the Clean Water Act that are smaller than its costs, though these other estimates note that they may also provide a lower bound on benefits. The definition also includes standards for boating and drinking water that we do not analyze. Asterisks denote p-value <.01 (***). This is potentially informative because increased taxes, sewer fees, or changes in other municipal expenditures are likely to be concentrated in the municipal authority managing the treatment plant, whereas the change in water quality is relevant for areas further downstream. Data include years 19622001. 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. The Author(s) 2018. We now compare the ratio of a grants effect on housing values (its measured benefits) to its costs. Smith and Wolloh (2012) study one measure of pollution (dissolved oxygen) in lakes beginning after the Clean Water Act and use data from one of the repositories we analyze. Column (2) includes plants in the continental United States with latitude and longitude data. Fecal coliforms are approximately log-normally distributed, and BOD and TSS are somewhat skewed (Online Appendix FigureI). These estimates are even less positive than the estimates for housing. Iowa State and Center for Agricultural Research and Development. 2011; Poor etal. The Clean Water Act of 1977 was an important and controversial environmental regulation the United States Congress had passed. Other possible general equilibrium channels describe reasons the effects of cleaning up an entire river system could differ from summing up the effects of site-specific cleanups. A fourth question involves health. If approved, it will protect clean drinking water, upgrade water infrastructure, preserve open space and family farms, fight climate change, and keep communities safe from extreme weather,. What are pros and cons of the clean water act? - Answers Some of the pernicious substances that have been found in water supply systems across the United States include: Arsenic (declared safe for drinking water by the government at twice the levels recommended by private scientists) Uranium Mercury Lead Manganese Perchlorate - a rocket fuel additive Trichloroethylene - a degreaser used in manufacturing Each of the four pollutants which are part of these fishable and swimmable definitions declined rapidly during this period. Each grant decreases dissolved oxygen deficits by 0.7 percentage points, and decreases the probability that downstream waters are not fishable by 0.7 percentage points. Asterisks denote p-value < .10 (*), < .05 (**), or < .01 (***). The tables separately list the different components of costs, and Section VII.C discusses possible effects of these costs on local taxes or fees. For the few governments that do not report when their fiscal year ends, we assume they report by calendar year. Dissolved oxygen deficit equals 100 minus dissolved oxygen saturation, measured in percentage points. 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. Season controls are a cubic polynomial in day of year. Notes. Many travel demand papers use small surveys that report distance traveled to a specific lake or for a narrow region. Optimizing consumers should equate the marginal disutility of pollution to the marginal cost of protection from pollution. From Exxon to BP: Has Some Number Become Better than No Number? Fifth, the 25-mile radius is only designed to capture 95% of recreational trips. 1974 Report to the Congress. Cumulative grants include grants in all previous years, not only census years. Water Pollution Control Act 1948. Standard errors are clustered by watershed. Leads decrease of about 10% a year may be related to air pollution regulations, such as prohibiting leaded gasoline. The EPA did audit grants to minimize malfeasance. Two are marginally significant (Panel C, column (1)), though the precision and point estimate diminish with the controls of column (2). Graphs show coefficients on year-since-grant indicators from regressions corresponding to the specification of TableV, columns (2) and (4). To analyze how Clean Water Act grants affected home values, we use a difference-in-differences estimate comparing the change in the log mean value of homes within a 0.25-, 1-, or 25-mile radius in any direction of the downstream river, before versus after the plant receives a grant, and between plants receiving grants in early versus late years. 8 Reasons the Clean Water Rule Fails to Protect People and - EcoWatch The point estimates imply that the benefits of the Clean Water Acts municipal grants exceed their costs if these unmeasured components of willingness to pay are three or more times the components of willingness to pay that we measure. Row 7 equals row 1 divided by 30 times row 5, since it assumes water quality improvements accrue for 30years. A third question involves substitution. Notes. Volume II, Clean Water Construction Grants Program News, Handbook of Procedures: Construction Grants Program for Municipal Wastewater Treatment Works, The Benefits and Costs of the Clean Air Act, 1970 to 1990, A Benefits Assessment of Water Pollution Control Programs Since 1972: Part 1, The Benefits of Point Source Controls for Conventional Pollutants in Rivers and Streams: Final Report, A Retrospective Assessment of the Costs of the Clean Water Act: 1972 to 1997: Final Report, Progress in Water Quality: An Evaluation of the National Investment in Municipal Wastewater Treatment, The National Costs to Implement TMDLs (Draft Report): Support Document 2, The Clean Water and Drinking Water Infrastructure Gap Analysis, ATTAINS, National Summary of State Information, Water Pollution: Information on the Use of Alternative Wastewater Treatment Systems, From Microlevel Decisions to Landscape Changes: An Assessment of Agricultural Conservation Policies, American Journal of Agricultural Economics. They give similar qualitative conclusions as the main results, though exact point estimates vary. The main regression estimates in TableII reflect the change in the share of pollution readings that are fishable and do not distinguish between cases where the share of readings that are fishable moved from 20% to 21%, or where it changed from 80% to 81%. 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. Finally, we can recalculate the ratios in TableVI considering only subsets of costs. The Clean Water Act of 1972 protects the "waters of the United States" from unpermitted discharges that may harm water quality for humans and aquatic life. Under the CWA, EPA has implemented pollution control programs such as setting wastewater standards for industry. 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). The curve 1 describes the offer function of a firm, and 2 of another firm. Identification from a national time series is difficult, since other national shocks like the 19731975 and early 1980s recessions, high inflation and interest rates, and the OPEC crisis make the 1960s a poor counterfactual for the 1970s and 1980s. 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. 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. Journal of the Association of Environmental and Resource Economists, Environmental Policy Choice: Pollution Abatement Subsidies, Water Pollution Policy. This does not seem consistent with our results because it would likely create pretrends in pollution or home values, whereas we observe none. Graphs show year fixed effects plus a constant from regressions that also control for monitoring site fixed effects, a day-of-year cubic polynomial, and an hour-of-day cubic polynomial, corresponding to equation (1) from the text. The Clean Water Act (CWA) contains a number of complex and interrelated elements of overall water quality management. It may be useful to highlight differences in how the Clean Air and Clean Water Acts answer four important questions about environmental regulation. We use the following regression to estimate the effects of Clean Water Act grants on water pollution: \begin{equation} The share of waters that are fishable has grown by 12 percentage points since the Clean Water Act. C1 - Econometric and Statistical Methods and Methodology: C3 - Multiple or Simultaneous Equation Models; Multiple, C4 - Econometric and Statistical Methods: Special, C6 - Mathematical Methods; Programming Models; Mathematical and Simulation, C8 - Data Collection and Data Estimation Methodology; Computer, E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal, E5 - Monetary Policy, Central Banking, and the Supply of Money and, E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General, F2 - International Factor Movements and International, F4 - Macroeconomic Aspects of International Trade and, F5 - International Relations, National Security, and International Political, H3 - Fiscal Policies and Behavior of Economic, H5 - National Government Expenditures and Related, H7 - State and Local Government; Intergovernmental, J5 - Labor-Management Relations, Trade Unions, and Collective, J6 - Mobility, Unemployment, Vacancies, and Immigrant, K4 - Legal Procedure, the Legal System, and Illegal, L1 - Market Structure, Firm Strategy, and Market, L7 - Industry Studies: Primary Products and, L9 - Industry Studies: Transportation and, M - Business Administration and Business Economics; Marketing; Accounting; Personnel. We use the following equation to assess year-by-year changes in water pollution: \begin{equation} Considering all owner-occupied homes within 25 miles of the river, the estimated ratio of the grants aggregate effects on home values to the grants costs is 0.26. The top decile of counties includes ratios between 0.31 and 0.41. 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 Other water pollution research generally specifies BOD and TSS in levels; practices vary for fecal coliforms. Hence decreases in acidic sulfur air pollution may have contributed to decreases in acidic water pollution. Connected dots show yearly values, dashed lines show 95% confidence interval. The clean water act is making sure every person has clean water to drink. The 1972 to 2001 change equals the fitted value Year*29 + Year*1[Year>=1972]*29. The Dirty 31: Is Your State Arguing Against Clean Water? Time of day controls are a cubic polynomial in hour of day. Paperless Cons. $4.2 Billion Environmental Bond Act: What you should know Notes. These graphs also suggest that existing evaluations of the Clean Water Act, which typically consist of national trend reports based on data from after 1972, may reflect forces other than the Clean Water Act. The only econometric analysis we know of such policies tests how the French policy of jointly taxing industrial air pollution and subsidizing abatement technologies affected emissions, using data from 226 plants (Millock and Nauges 2006). Notes. Calculations include grants given in 19622000. Compared to the mean grant, grants to declining urban areas are significantly less cost-effective, whereas grants to the generally rural counties where many people go fishing or swimming are significantly more effective. Column (4) includes imputed home values for the nonmetro areas that were not in the 1970 or 1980 census.24, Clean Water Act Grants: Costs and Effects on Home Values (|${\$}$|2014B|$\mathrm n$|). Each observation in a regression is a plant-downstream-year tuple. Grant costs include local and federal capital expenditures plus operating and maintenance costs over the 30-year life span for which we estimate grants affect water pollution. Search for other works by this author on: University of California, Berkeley and National Bureau of Economic Research. 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. Reasons We Need the Clean Water Rule | whitehouse.gov Third, if some grant expenditures were lost to rents (e.g., corruption), then those expenditures represent transfers and not true economic costs. This map assumes the same hedonic price function and reflects spatial heterogeneity in housing unit density.25 The map shows that the ratio of measured benefits to costs is larger in more populated counties. 2001; Jeon etal. In the presence of such general equilibrium changes, our estimates could be interpreted as a lower bound on willingness to pay (Banzhaf 2015). Drinking water treatment falls under a separate set of regulations, the Safe Drinking Water Act. We analyze all these physical pollutants in levels, though Online Appendix Tables III and VI show results also in logs. This article is published and distributed under the terms of the Oxford University Press, Standard Journals Publication Model (. Column (4) reweights estimates using the inverse of the estimated propensity score for inclusion in the balanced panel of cities. First, people might have incomplete information about changes in water pollution and their welfare implications. The Pros And Cons Of Clean Water - Internet Public Library After 1990, the trends approach zero. Second, because the difference-in-differences specification used for home values does not use upstream areas as a counterfactual, it involves the stronger identifying assumption that areas with more and fewer grants would have had similar home price trends in the absence of the grants. Our recreation data also represent all trips, and water-based recreation trips might require different travel distances. BOD, dissolved oxygen deficits, and total suspended solids all declined at 1% to 2% a year. For this reason, our preferred methodology in Section IV.B to assess how Clean Water Act grants affect water pollution uses a triple-difference estimator comparing upstream and downstream areas. 2001; Steinwender, Gundacker, and Wittmann 2008; Artell, Ahtiainen, and Pouta 2013). This article assembles an array of new data to assess water pollutions trends, causes, and welfare consequences. Cost-effective regulation equates marginal abatement costs across sources, which requires regulating all sources. 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. Second, measuring cost-effectiveness is insufficient to reach conclusions about social welfare; Section VII discusses peoples value for these changes. It is interesting to consider possible explanations for these slowing trends. Annual cost to make a river-mile fishable, 8. These comparisons also highlight features of the Clean Water Act that are not widely recognized and could lead it to have lower net benefits than some other environmental regulation. Overall, this evidence does not suggest dramatic heterogeneity in cost-effectiveness. Standard errors are clustered by watershed. The Clean Water Act's grantmaking system creates higher costs than market-based regulations, argue Keiser and Shapiro. In 2020, the Clean Air Act Amendments will prevent over 230,000 early deaths. The Clean Water, Clean Air, and Green Jobs Bond Act will: Decent Essays. Flint, Michigan, has recently had high lead levels in drinking water due to switching its water source from the Detroit River to the Flint River. Panel B analyzes how grants affect log mean rental values. Clean Air Act Essays | ipl.org Notes. The negatives is it is not strongly enforced, violators only pay a small fine, countries can exempt themselves from certain species. ) is that it reflects the equilibrium of firms that supply housing and consumers that demand housing. Moreover, we are not aware of any existing ex post estimates of the cost required to make a river-mile fishable or to decrease dissolved oxygen deficits. The graphs show no obvious evidence of a mean shift or trend break in water pollution around 1972. 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, we limit regression estimates to the set of tracts reporting home values in all four years 1970, 1980, 1990, and 2000. Benefits and Costs of the Clean Air Act Section 812 of the 1990 Amendments (Public Law 101-549) requires EPA conduct scientifically reviewed studies of the impact of the Clean Air Act on the public health, economy and environment of the United States. Standard errors are clustered by city. 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. The cost-effectiveness estimates for fishable regressions are based on Online Appendix TableVI, row 13. We also discuss trends in three other groups of water quality measures: industrial pollutants, nutrients, and general measures of water quality (Online Appendix TableIV).18 All three industrial pollutants have declined rapidly. The estimate in column (4), including homes within a 25-mile radius of downstream rivers, is small and statistically insignificant but actually negative. The USEPAs (2000a) cost-benefit analysis of the Clean Water Act estimates that nonuse values are a sixth as large as use values. "Clean Water Act" became the Act's common name with amendments in 1972. The historic law was designed to protect all of our waters - from the smallest streams to the mightiest rivers - from pollution and destruction. 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. Finally, we average this ratio across plants in each county. Incomplete information would be especially important if pollution abatement improves health. 1251 et seq. Most of these alternative approaches have similar sign, magnitude, and precision as the main results. Nutrients were not targeted in the original Clean Water Act but are a focus of current regulation. The Clean Water Act has protected our health for more than 40 years -- and helped our nation clean up hundreds of thousands of miles of polluted waterways. RFF is committed to being the most widely trusted source of research insights and policy solutions leading to a healthy environment and a thriving economy. Analysis includes homes within a given distance of downstream river segments. Online Appendix TableVII investigates heterogeneity in measured benefits and costs; Online Appendix E.3 discusses the results. Objective versus Subjective Assessments of Environmental Quality of Standing and Running Waters in a Large City, 1967 Census of Manufactures: Water Use in Manufacturing, National Water Quality Inventory. The CWA made it unlawful to discharge any pollutant from a point source into navigable waters, unless a permit was obtained: National Pollutant Discharge Elimination System (NPDES), EPA History: Federal Water Pollution Control Act Amendments of 1972, The official text of the CWA continues to be available in. This literature also finds that federal grants that require local matching funds and specify the grants purpose, both characteristics of the Clean Water Act grants, tend to have higher pass-through rates. Brackets show 95% confidence intervals. Objective Measures in the Valuation of Water Quality, Journal of Environmental Economics and Management, Water Use and Conservation in Manufacturing: Evidence from U.S. Microdata, A Nationwide Comparison of Driving Distance versus Straight-Line Distance to Hospitals, The Value of Clean Water: The Publics Willingness to Pay for Boatable, Fishable, and Swimmable Quality Water, Efficient Investment in Wastewater Treatment Plants, The Effectiveness of Incomplete and Overlapping Pollution Regulation: Evidence from Bans on Phosphate in Automatic Dishwasher Detergent, Something in the Water: Contaminated Drinking Water and Infant Health, Defensive Investments and the Demand for Air Quality: Evidence from the NOx Budget Program, Panel Data Analysis of Regulatory Factors Shaping Environmental Performance, Regulatory Factors Shaping Environmental Performance at Public-Owned Treatment Plants, The Consequences of Industrialization: Evidence from Water Pollution and Digestive Cancers in China, Residents Perceptions of Water Quality Improvements Following Remediation Work in the Pymmes Brook Catchment, North London, UK. How the Clean Water Act Protects Your Rivers - American Rivers 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. We find large declines in most pollutants that the Clean Water Act targeted. This predictable spatial variation in the net benefits of water quality variation suggests that allowing the stringency of regulation to vary over space may give it greater net benefits (Muller and Mendelsohn 2009; Fowlie and Muller forthcoming). The bid function is the consumers indifference curve in the trade-off between the price of a home and the amount of attribute j embodied in the home. 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