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. The USEPAs (2000a) cost-benefit analysis of the Clean Water Act estimates that nonuse values are a sixth as large as use values. Has Surface Water Quality Improved since the Clean Water Act? 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. A few pieces of evidence help evaluate the relevance of these issues. Water quality improvement and resilient infrastructure Not less than $650 million (increased by $100 million over 2020 proposal) wastewater infrastructure projects municipal stormwater projects Municipal grants for stormwater with green infrastructure Agricultural nutrient pollution Harmful Algal Bloom abatement Pros of legalism are There were much fewer crimes in china and the laws. \end{equation}, \begin{equation*} Rows 2 and 3 are aggregated from GICS microdata. All values in billions (|${\$}$|2014). None of these subsets of grants considered has a ratio of measured benefits to costs above one, though many of the confidence regions cannot reject a ratio of 1. We find suggestive evidence that ratios of measured benefits to costs follow sensible patterns, though not all estimates are precise. Finally, we can recalculate the ratios in TableVI considering only subsets of costs. Cumulative grants include grants in all previous years, not only census years. \end{equation}. This predictable spatial variation in the net benefits of water quality variation suggests that allowing the stringency of regulation to vary over space may give it greater net benefits (Muller and Mendelsohn 2009; Fowlie and Muller forthcoming). The point estimate implies that each grant decreases TSS by 1%, though this is imprecise. First, we limit regression estimates to the set of tracts reporting home values in all four years 1970, 1980, 1990, and 2000. A review of 10 U.S. studies found pass-through estimates between 0.25 and 1.06 (Hines and Thaler 1995). We did not use these data because they focus on 1990 and later, mainly measure pesticides, and have a small sample. Federal spending grew to between |${\$}$|10 and |${\$}$|20 billion a year in the late 1970s. The EPA did audit grants to minimize malfeasance. These full data show more rapid declines before 1972 than after it. Effects of Clean Water Act Grants on Housing Demand. 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. Effects of Clean Water Act Grants on Water Pollution: Event Study Graphs. CBO (1985) dictates this time period because it provides the national total state and local spending data underlying this graph. 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. Decent Essays. 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. 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. However, it leaves it up to EPA. 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. Paperless Cons. Water Pollution Control Act 1948. \end{equation*}. The clean water act is making sure every person has clean water to drink. The basis of the CWA was enacted in 1948 and was called the Federal Water Pollution Control Act, but the Act was significantly . State Clean Water Administrators Release Clean Water Act Success Municipal spending data from Annual Survey of Governments and Census of Governments. 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}. Independent evidence is generally consistent with this idea. The Roles of Environmental Regulation, Productivity, and Trade. 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. 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. 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 Clean Water Act was produced as a means for the EPA to implement pollution control programs alongside setting water quality standards for all contaminants in surface waters. What are pros and cons of the clean water act? - Answers Ninety-five percent confidence regions are in brackets. What are pros and cons of legalism? Hence decreases in acidic sulfur air pollution may have contributed to decreases in acidic water pollution. Under the CWA, EPA has implemented pollution control programs such as setting wastewater standards for industry. They suggest similar conclusions as Panels A and B. \end{align}, To estimate the pass-through of Clean Water Act grants to local expenditure, we regress cumulative municipal sewerage capital expenditures, \begin{equation} A fourth question involves health. This explanation is less relevant for the slowing trends in continuous variables like BOD, fecal coliforms, or TSS. TableV analyzes how Clean Water Act grants affect housing. The Author(s) 2018. But if local governments ultimately pay these costs, they could depress home values. 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. We include all capital and operating and maintenance costs in the measure of total grant project costs. 8 Reasons the Clean Water Rule Fails to Protect People and - EcoWatch JavaScript appears to be disabled on this computer. We also report unweighted estimates. The graphs show no obvious evidence of a mean shift or trend break in water pollution around 1972. Data cover the years 19622001. We also estimate linear water pollution trends using the following equation: \begin{equation} Research does find statistically significant but imperfect correlation between perceived local water pollution and objectively measured local water pollution (Faulkner etal. In Panel B, the year variables are recentered around 1972. Data cover decennial census years 19702000. A city may spend a grant in years after it is received, so real pass-through may be lower than nominal pass-through. The Clean Air Act: Successes and Challenges Since 1970 Column (1) shows estimates for homes within a quarter mile of downstream waters. 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. Asterisks denote p-value <.01 (***). Most of these estimates are small and actually negative. 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. Home prices and rents are deflated to 2014 dollars by the Bureau of Labor Statistics consumer price index for urban consumers. A blueprint for clean water everywhere, for everyone Notes. TableIV reports estimates corresponding to equation (5). 3 Pages. 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. Muehlenbachs, Spiller, and Timmins (2015) relate fracking to home values and drinking water. Standard errors are clustered by watershed. The cost-effectiveness estimates for fishable regressions are based on Online Appendix TableVI, row 13. Before The Clean Water Act. Time of day controls are a cubic polynomial in hour of day. 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. 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 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. The Clean Water, Clean Air, and Green Jobs Environmental Bond Act of 2022 (Proposition 1) will provide $4.2 billion to projects across New York State that contribute to improving public health, increasing access to nature, and protecting people from deadly heat and flooding. Dollar values in |${\$}$|2014 millions. In 1969 Ohio's Cuyahoga River was so fouled by industrial pollution that the river caught on fire. \end{equation}. The historic law was designed to protect all of our waters - from the smallest streams to the mightiest rivers - from pollution and destruction. All You Need to Know About The Clean Water Act & Its Amendments 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. The change in the value of housing is estimated by combining the regression estimates of TableV with the baseline value of housing and rents from the census. The Clean Air Act is a United States federal law designed to control air pollution on a national level. Nutrients were not targeted in the original Clean Water Act but are a focus of current regulation. Grants and population are both skewed, so large shares of both are in the top decile. Panel A shows modest evidence that in the years after a plant receives a grant, the values of homes within 0.25 mile of the downstream river increase. This tells us little about the Clean Water Acts effects, however, since its investments may take time to affect water pollution, expanded during the 1970s, and may be effective even if not obvious from a national time series. The increases are small and statistically insignificant in most years. These regressions are described in equation (4) from the text. Notes. Environmental Bill: The Pros and Cons - The New York Times Fecal coliforms are approximately log-normally distributed, and BOD and TSS are somewhat skewed (Online Appendix FigureI). Our findings are consistent with these general conclusions. We now turn to estimate the cost-effectiveness of these grants. These calculations use our regression estimates and the cost data. 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. Why farmers and ranchers think the EPA Clean Water Rule goes too far - PBS Advantages and Disadvantages of Water Quality Data Submission Tools Dependent variable mean refers to years 19621971. Column (3) includes all plants and grants with minimum required data (e.g., grants linked to the exact treatment plant even if without latitude or longitude data) and assumes all plants have 25 miles of rivers downstream. Q_{icy}=\sum _{\tau =1963}^{\tau =2001}\alpha _{\tau }1[y_{y}=\tau ]+X_{icy}^{^{\,\,\prime }}\beta +\delta _{i}+\epsilon _{icy}. It is interesting to consider possible explanations for these slowing trends. The 1972 law was formally called the Federal Water Pollution Control Amendments, though we follow common practice in referring to it as the Clean Water Act. The product is a tablet that turns any type of substance into clean substance. Pass-through of Grants to Municipal Sewerage Capital Spending. Because most grants were given in the 1970s, we observe water pollution up to 10years before and 1525years after most grants. Optimizing consumers should equate the marginal disutility of pollution to the marginal cost of protection from pollution. Online Appendix FigureVII illustrates. Lack civil or criminal penalties for violations. Asterisks denote p-value < .10 (*), < .05 (**), or < .01 (***). The National Survey of Recreation and the Environment and its predecessor, the National Recreation Survey, do not systematically summarize trips taken and travel distances. 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). Consequences of the Clean Water Act and the Demand for Water Quality 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? Annual cost to increase dissolved oxygen, Panel D: Log total value of housing stock, Copyright 2023 President and Fellows of Harvard College. This implies that pollution levels in upstream and downstream waters had similar trends before grants were received. Row 8 equals row 1 divided by 30 times row 6. A few points are worth noting. Third, if some grant expenditures were lost to rents (e.g., corruption), then those expenditures represent transfers and not true economic costs. We use the following regression to estimate the effects of Clean Water Act grants on water pollution: \begin{equation} The water can be sea water, sewage water or any other dirty water. The offer function is the firms isoprofit curve in the trade-off between home price and attribute j. All results have been reviewed to ensure that no confidential information is disclosed. 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. Another possible channel involves ecology. We recognize the potential importance of nonuse values for clean surface waters and the severe challenges in accurately measuring these values.26 Other categories potentially not measured here include the value for commercial fisheries, industrial water supplies, lower treatment costs for drinking water, and safer drinking water.27 Evidence on the existence and magnitude of the benefits from these other channels is limited, though as mentioned already, recreation and aesthetics are believed to account for a large majority of the benefits of clean surface waters.
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