Notes. Panels A and B show different ranges of values on their y-axes. Provide federal assistance to control municipal discharges of wastewater. 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. Incomplete information would be especially important if pollution abatement improves health. Drinking water treatment falls under a separate set of regulations, the Safe Drinking Water Act. We impute these values from a panel regression of log mean home values on year fixed effects and tract fixed effects. A lock (LockA locked padlock) or https:// means youve safely connected to the .gov website. Some studies in historic or developing country settings, where drinking water regulation is limited, relate surface water quality to health (Ebenstein 2012; Greenstone and Hanna 2014; Alsan and Goldin forthcoming). Regulating Untaxable Externalities: Are Vehicle Air Pollution Standards Effective and Efficient? We study |${\$}$|650 billion in expenditure from 35,000 grants the federal government gave cities to improve wastewater treatment plants. The ratio of the change in housing values to federal capital costs in columns (2)(4) of TableVI ranges from 0.8 to 0.9; the ratio of the change in housing values to the sum of federal capital costs and operating costs (but excluding local capital costs) in these columns is around 0.3. Reasons We Need the Clean Water Rule | whitehouse.gov The bottom decile of counties, for example, includes ratios of measured benefits to costs of below 0.01. We assume that housing markets are competitive and that each consumer rents one house. 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. 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. Share sensitive information only on official, secure websites. *The Clean Water Program, which calls for $790 million for municipal-treatment improvements, nonpoint-source-control projects, aquatic-habitat restoration and implementation of management plans. The statistic we use reflects the binary cutoff of whether a majority of readings are fishable. The simplest specification of column (1), which includes rivers with water quality data, implies that it cost |${\$}$|0.67 million a year to increase dissolved oxygen saturation in a river-mile by 10%; the broadest specification of column (3), which assumes every treatment plant has 25 miles of downstream waters affected, implies that it cost |${\$}$|0.53 million a year. This does not seem consistent with our results because it would likely create pretrends in pollution or home values, whereas we observe none. The negatives is it is not strongly enforced, violators only pay a small fine, countries can exempt themselves from certain species. Electricity-generating units and other sources do contribute to thermal pollution in rivers, but increasing temperature is an outlier from decreasing trends in most other water pollutants. Search for other works by this author on: University of California, Berkeley and National Bureau of Economic Research. 33 U.S.C. But municipal investments that occurred were closely connected to grants, and point estimates imply that the grant costs in our data accurately represent the actual change in spending. First is the choice of policy instrument. The map in Online Appendix FigureVIII shows heterogeneity in the ratio of measured benefits to costs across U.S. counties. The Clean Water Act and Water Pollution, VI. Benefits and Costs of the Clean Air Act 1990-2020, the Second - US EPA Standard errors are clustered by watershed. Each observation in the data is a pollution reading. Online Appendix FigureVI shows national trends in federal versus state and local spending on wastewater treatment capital over 19601983.21 State and local spending on wastewater treatment capital declined steadily from a total of |${\$}$|43 billion in 1963 to |${\$}$|22 billion in 1971 and then to |${\$}$|7 billion annually by the late 1970s. Choosing Environmental Policy: Comparing Instruments and Outcomes in the United States and Europe, Contingent Valuation: From Dubious to Hopeless, Nor Any Drop to Drink: Public Regulation of Water Quality. 3 Pages. Point sources are discrete conveyances such as pipes or man-made ditches. 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. Abstract. Fecal coliforms are approximately log-normally distributed, and BOD and TSS are somewhat skewed (Online Appendix FigureI). See Kline and Walters (2016) for a related analysis in education. None of these ratios exceeds 1, though they are closer to 1 than are the values in TableVI. Estimates without the basin year controls are more positive but also more sensitive to specification, which is one indication that the specification of equation (6) provides sharper identification. For full access to this pdf, sign in to an existing account, or purchase an annual subscription. Fishable readings have BOD below 2.4mg/L, dissolved oxygen above 64% saturation (equivalently, dissolved oxygen deficits below 36%), fecal coliforms below 1,000 MPN/100mL, and TSS below 50mg/L. Problem with enforcement. 2013). In the years after a grant, downstream waters have 12% lower dissolved oxygen deficits, and become 12% less likely to violate fishing standards. These estimates are even less positive than the estimates for housing. Industrial Water Pollution in the United States: Direct Regulation or Market Incentive? Third, this analysis is different from the question of what municipal spending (and pollution and home values) would be in a world without the Clean Water Act. 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. Data include decennial census years 19702000. Parts of the Clean Air Act use cap-and-trade systems, but nearly none of the Clean Water Act does. Each grant significantly decreased pollution for 25 miles downstream, and these benefits last for around 30years. The Clean Water Act fight polluted water by adopting a strategy that targets point sources of water pollution. (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. 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. 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. 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. 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. We report both the double-difference and triple-difference estimators for both outcomes, and obtain qualitatively similar conclusions. Legal attempts at resolution: CIITES pros are it is harder and takes a lot longer to get a permit to cut down trees and it protects 700 other species. Asterisks denote p-value < .10 (*), < .05 (**). Graphs show coefficients on year-since-grant indicators from regressions corresponding to the specification of TableV, columns (2) and (4). Panel A reports estimates of how grants affect log mean home values. The Clean Water Act addressed a classic externality. Effects of Clean Water Act Grants on Log Mean Home Values: Event Study Graphs. The basis of the CWA was enacted in 1948 and was called the Federal Water Pollution Control Act, but the Act was significantly . Iowa State and Center for Agricultural Research and Development. 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. Shapiro thanks fellowships from the EPA, MIT-BP, Martin Family Fellows, the Schultz Fund, the Yale Program on Applied Policy, and NSF Grant SES-1530494 for generous support. Research does find statistically significant but imperfect correlation between perceived local water pollution and objectively measured local water pollution (Faulkner etal. Lack civil or criminal penalties for violations. 2001; Steinwender, Gundacker, and Wittmann 2008; Artell, Ahtiainen, and Pouta 2013). Standard errors are clustered by watershed. People breathe the air quality where they live, and relocating to another airshed or some other defenses against air pollution are costly (Deschenes, Greenstone, and Shapiro 2017). Ninety-five percent confidence regions are in brackets. Another possible channel involves ecology. 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. 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. Q_{pdy} & =\sum _{\tau =-10}^{\tau =25}\gamma _{\tau }1[G_{p,y+\tau }=1]d_{d}+X_{pdy}^{^{\,\,\prime }}\beta +\eta _{pd}+\eta _{py}+\eta _{dwy}+\epsilon _{pdy}. Our topic is clean water and sanitation. 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. Clean Water Act Cons - 679 Words | Bartleby These values are similar without survey weights, or when excluding outlier reported travel distances (above 150 miles). Online Appendix FigureVII illustrates. Clean Water, Clean Air, and Green Jobs Environmental Bond Act of 2022 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. Water Pollution Control Act 1948. 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). 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.