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TableIII presents estimates of cost-effectiveness. These estimates are even less positive than the estimates for housing. Fourth, to obtain regression estimates for the average housing unit and provide an efficient response to heteroskedasticity, we include GLS weights proportional to the number of total housing units in the plant-year observation and to the sampling probability.17. ) is that it reflects the equilibrium of firms that supply housing and consumers that demand housing. Clean Water Act Cons - 679 Words | Bartleby 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. Connected dots show yearly values, dashed lines show 95% confidence interval, and 1962 is the reference category. Individual homes that are connected to a municipal system, use a septic system, or do not have a surface discharge do not need aNPDES permit; Industrial, municipal, and other facilities must obtain permits if their discharges go directly to surface waters. Most recent cost-benefit analyses of the Clean Water Act estimate that a substantial share of benefits come from recreation and aesthetics channels (Lyon and Farrow 1995; Freeman 2000; USEPA 2000a). Fecal coliforms are approximately log-normally distributed, and BOD and TSS are somewhat skewed (Online Appendix FigureI). 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. Asterisks denote p-value < .10 (*), < .05 (**), or < .01 (***). The 1972 to 2001 change equals the fitted value Year*29 + Year*1[Year>=1972]*29. A second question is scope. Paperless Cons. Row 7 equals row 1 divided by 30 times row 5, since it assumes water quality improvements accrue for 30years. 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. V_{py}=\gamma G_{py}+X_{py}^{^{\,\,\prime }}\beta +\eta _{p}+\eta _{wy}+\epsilon _{py}. 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. As we approach the formal 50 th Anniversary of the Clean Water Act (CWA) next month, the Association of Clean Water Administrators (ACWA), which represents state clean water regulatory agencies, has partnered with EPA's Office of Water to create a " Clean Water Act Success Stories Map ." Drinking water treatment falls under a separate set of regulations, the Safe Drinking Water Act. Diving Into the Benefits of the Clean Water Act Market-Based Emissions Regulation When Damages Vary Across Sources: What Are the Gains from Differentiation? 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. 8 Reasons the Clean Water Rule Fails to Protect People and - EcoWatch 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. If you experience a problem reading a document with assistive technology, please contact us. 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. Hence our preferred housing estimates come from difference-in-differences regressions analyzing homes within a 25-mile radius of river segments that are downstream of treatment plants. 679 Words. E[G_{py}d_{d}\cdot \epsilon _{dpy}|X_{pdy}^{^{\,\,\prime }},\eta _{pd},\eta _{py},\eta _{dwy}]=0. Notes. 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. 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. Municipal spending data from Annual Survey of Governments and Census of Governments. Clean Water Act Grants and Water Pollution, Steinwender, Gundacker, and Wittmann 2008, Muehlenbachs, Spiller, and Timmins (2015), U.S. Government Accountability Office 1994, https://ofmpub.epa.gov/waters10/attains_nation_cy.control, https://academic.oup.com/journals/pages/open_access/funder_policies/chorus/standard_publication_model, Receive exclusive offers and updates from Oxford Academic, 6. The estimates in TableIV are generally consistent with near complete pass-through, that is, little or no crowding out or in beyond the required municipal capital copayment. Focus on balancing cost and health . Our approach focuses on the effects of cleaning up an individual site and is not as well suited to capture the potentially distinct effects of cleaning up entire river systems. We find that by most measures, U.S. water pollution has declined since 1972, though some evidence suggests it may have declined at a faster rate before 1972. Our estimates are consistent with no crowding out for an individual grant, but the existence of the Clean Water Act may decrease aggregate municipal investment in wastewater treatment. We emphasize a few caveats in interpreting TableIV. Data cover decennial census years 19702000. We include all capital and operating and maintenance costs in the measure of total grant project costs. 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%. Q_{icy}=\sum _{\tau =1963}^{\tau =2001}\alpha _{\tau }1[y_{y}=\tau ]+X_{icy}^{^{\,\,\prime }}\beta +\delta _{i}+\epsilon _{icy}. These calculations use our regression estimates and the cost data. This explanation is less relevant for the slowing trends in continuous variables like BOD, fecal coliforms, or TSS. The increases are small and statistically insignificant in most years. The census long form has housing data and was collected from one in six households on average, but the exact proportion sampled varies across tracts. The last 5% of trips might account for disproportionate surplus because they represent people willing to travel great distances for recreation. JavaScript appears to be disabled on this computer. Agricultural Sediment Control, Environmental Regulations, Air and Water Pollution, and Infant Mortality in India. The Author(s) 2018. Second, this city-level difference-in-differences estimate cannot use the upstream-downstream comparison for identification. The historic law was designed to protect all of our waters - from the smallest streams to the mightiest rivers - from pollution and destruction. The basis of the CWA was enacted in 1948 and was called the Federal Water Pollution Control Act, but the Act was significantly . Benefits and Costs of the Clean Air Act | US EPA Table provides information about pros & cons of various water quality data submission tools, for use of tribal water quality programs under Clean Water Act Section 106 Tribal grants program. Estimates come from regression specifications corresponding to TableV, columns (3) and (4). Any opinions and conclusions expressed herein are those of the authors and do not necessarily represent the views of the U.S. Census Bureau. Under the CWA, EPA has implemented pollution control programs such as setting wastewater standards for industry. Row 8 equals row 1 divided by 30 times row 6. Online Appendix TableVI shows a variety of sensitivity analyses, and Online Appendix E.2 discusses each. Finally, we interpret our pass-through estimates cautiously because they reflect only 198 cities, do not use upstream waters as a comparison group, and reflect pass-through of marginal changes in investment, rather than the entire Clean Water Act. 1251 et seq. This analysis, however, is subject to serious concerns about use and nonuse estimates in the underlying studies. Market-based instruments are believed to be more cost-effective than alternatives. 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. 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. The point estimate implies that each grant decreases TSS by 1%, though this is imprecise. 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. Federal spending grew to between |${\$}$|10 and |${\$}$|20 billion a year in the late 1970s. Dissolved oxygen deficit equals 100 minus dissolved oxygen saturation, measured in percentage points. Effects of Clean Water Act Grants on Housing Demand. Connected dots show yearly values, dashed lines show 95% confidence interval. Online Appendix E.3 discusses interpretations of our housing estimates under alternative pass-through numbers. They suggest similar conclusions as Panels A and B. The EPA did audit grants to minimize malfeasance. Environmental Bill: The Pros and Cons - The New York Times This contrasts with the regulation of surface water quality in developing countries and in the historic United States (Ebenstein 2012; Alsan and Goldin forthcoming), where drinking water is less well filtered, piped water access less widespread, and stringent drinking water standards less common or less well enforced. 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. The Clean Water Act, by contrast, mostly ignores nonpoint pollution sources like agriculture. The graphs show no obvious evidence of a mean shift or trend break in water pollution around 1972. Share sensitive information only on official, secure websites. Log specifications would implicitly assume that the percentage change in a rivers pollution due to a grant is the same for a river with a high background concentration, which is unlikely. We also explored estimates controlling for city-year population or city-year municipal revenue. "Clean Water Act" became the Act's common name with amendments in 1972. One is to estimate hedonic regressions excluding housing units in the same city as the wastewater treatment plant. For full access to this pdf, sign in to an existing account, or purchase an annual subscription. Graphs show coefficients on year-since-grant indicators from regressions corresponding to the specification of TableV, columns (2) and (4). In Panel B, the year variables are recentered around 1972. Wetlands, Flooding, and the Clean Water Act - Resources for the Future Data cover the years 19622001. This assumption could also fail if changes in governments effectiveness at receiving grants are correlated with governments effectiveness at operating treatment plants. Search for other works by this author on: University of California, Berkeley and National Bureau of Economic Research. Row 6 is calculated by multiplying each grant by the parameter estimate in TableII, column (1), and applying the result to all waters within 25 miles downstream of the treatment plant. An official website of the United States government. 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. Regulating Untaxable Externalities: Are Vehicle Air Pollution Standards Effective and Efficient? Cost-effective regulation equates marginal abatement costs across sources, which requires regulating all sources. Clean Air Act Essays | ipl.org The Clean Water Act targets industry by focusing on the chemical aspects of polluted water. 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. EPA has also developed national water quality criteria recommendations for pollutants in surface waters. TableII shows that these grants cause large and statistically significant decreases in pollution. 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. This article is published and distributed under the terms of the Oxford University Press, Standard Journals Publication Model (. In Panel A, the main explanatory variable excludes required municipal contributions, while Panel B includes them. Online Appendix FigureV shows the effect of a grant by distance downstream from a treatment plant; few data are available to estimate effects separately for each five-mile bin along the river, and estimates are correspondingly less precise. Pros And Cons Of The Clean Water Act - 329 Words | Cram 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? How the Clean Water Act Protects Your Rivers - American Rivers 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). Panel A reports estimates of how grants affect log mean home values. Standard errors are clustered by watershed. Clean Water Act Pros And Cons - 1085 Words | Cram Ninety-five percent confidence regions are in brackets. The Truth About the Safe Drinking Water Act - Off The Grid News 2013). A .gov website belongs to an official government organization in the United States. Dependent variable mean describes mean in 19621972. Why farmers and ranchers think the EPA Clean Water Rule goes too far - PBS 7 things to know about the Clean Water Act after 50 years These full data show more rapid declines before 1972 than after it. Provide federal assistance to control municipal discharges of wastewater. We deflate operating and maintenance costs and rents at a rate of 7.85% (Peiser and Smith 1985).23, Column (1) of TableVI includes only owned homes within a 1-mile radius of the downstream river segments; column (2) includes homes within a 25-mile radius; and column (3) adds rental units. We assume that housing markets are competitive and that each consumer rents one house. We use the following equation to assess year-by-year changes in water pollution: \begin{equation} PDF Clean Water Act and Pollutant Total Maximum Daily Loads (TMDLs) That study does not separately identify the effect of the pollution tax from the effect of the abatement subsidy. Panels A and B reflect the classic hedonic model, with fixed housing stock. Event study graphs for other pollutants are consistent with these results, but are less precise (Online Appendix FigureIV). Column (3) include all homes within 1 mile, and column (4) includes homes within 25 miles. The product is a tablet that turns any type of substance into clean substance. Water is one of the resources on the Earth that is becoming more and more scarce and the . Notes. The estimate in column (4), including homes within a 25-mile radius of downstream rivers, is small and statistically insignificant but actually negative. The Clean Water Act's grantmaking system creates higher costs than market-based regulations, argue Keiser and Shapiro. Standard errors are clustered by watershed. These studies ask: Connected dots show yearly values, dashed lines show 95% confidence interval. Clean Water Act Cons. Fifth, the 25-mile radius is only designed to capture 95% of recreational trips. This does not seem consistent with our results because it would likely create pretrends in pollution or home values, whereas we observe none. Column (4) implies that each grant increases mean home values within 25 miles of affected waters by 0.024 percentage point. Non-U.S. studies and more recent U.S. estimates find an even wider range (Gamkhar and Shah 2007). Q_{pdy}=\gamma G_{py}d_{d}+X_{pdy}^{^{\,\,\prime }}\beta +\eta _{pd}+\eta _{py}+\eta _{dwy}+\epsilon _{pdy}. Clean Water, Clean Air, and Green Jobs Environmental Bond Act of 2022 The map in Online Appendix FigureVIII shows heterogeneity in the ratio of measured benefits to costs across U.S. counties. Panel C estimates the effect of grants on log housing units and Panel D on the log of the total value of the housing stock. Advantages and Disadvantages of Water Quality Data Submission Tools 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. Data on industrial water pollution in the 1960s is less detailed, though manufacturing water intake (which is highly correlated with pollution emissions) was flat between 1964 and 1973 due to increasing internal recycling of water (Becker 2016). We also report unweighted estimates. 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. We now compare the ratio of a grants effect on housing values (its measured benefits) to its costs. Online Appendix TableVII investigates heterogeneity in measured benefits and costs; Online Appendix E.3 discusses the results. In 2020 the EPA narrowed the definition of 'Waters of the United States', significantly limiting wetland protection under the Clean Water Act. The Clean Water Act and Water Pollution, VI. The largest ratios of estimated benefits to costs are for areas where outdoor fishing or swimming is common (ratio of 0.53), for high-amenity urban areas (ratio of 0.40), and in the South (ratio of 0.84). We did not use these data because they focus on 1990 and later, mainly measure pesticides, and have a small sample. 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. The Clean Water Act first appeared in American legislation in 1948 with the Federal Water Pollution Control Act. Most others are statistically indistinguishable from the mean grant, though there is some moderate (if statistically insignificant) heterogeneity in point estimates. Column (2) includes plants in the continental United States with latitude and longitude data.