In part for this reason, we focus on specifications including basin year fixed effects and the interaction of baseline characteristics with year fixed effects. These estimates are even less positive than the estimates for housing. Alternatively, the most distant travelers might be marginal. Connected dots show yearly values, dashed lines show 95% confidence interval. A .gov website belongs to an official government organization in the United States. The basis of the CWA was enacted in 1948 and was called the Federal Water Pollution Control Act, but the Act was significantly . The map in Online Appendix FigureVIII shows heterogeneity in the ratio of measured benefits to costs across U.S. counties. 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 suggest similar conclusions as Panels A and B. Standard errors are clustered by watershed. This extra subsidy fell to 75% in 1984, and about 8% of projects received the subsidy for innovative technology (U.S. Government Accountability Office 1994). GLS estimates the effect for the average pollution reading rather than for the average plant downstream year. 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 ." 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. 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 The statistic we use reflects the binary cutoff of whether a majority of readings are fishable. Online Appendix FigureVII illustrates. Effects of Clean Water Act Grants on Log Mean Home Values: Event Study Graphs. We now compare the ratio of a grants effect on housing values (its measured benefits) to its costs. We also report event study graphs of outcomes relative to the year when a facility receives a grant: \begin{align} One possible channel is that wages change to reflect the improvement in amenities (Roback 1982). Data include years 19622001. None of these ratios exceeds 1, though they are closer to 1 than are the values in TableVI. 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, people might have incomplete information about changes in water pollution and their welfare implications. 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. 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. Because no reference category is required in this kind of event study setting, where one observation can receive multiple treatments, for ease of interpretation, we recenter the graph line so the coefficient for the year before treatment ( = 1) equals 0. The share of waters that are not fishable fell on average by about half a percentage point per year, and the share that are not swimmable fell at a similar rate (TableI, Panel A). Each of the four pollutants which are part of these fishable and swimmable definitions declined rapidly during this period. 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. 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. Fifth, the 25-mile radius is only designed to capture 95% of recreational trips. Event study graphs corresponding to equation (4) support these results. The Author(s) 2018. 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. Column (3) include all homes within 1 mile, and column (4) includes homes within 25 miles. 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. First is the choice of policy instrument. A fourth question involves health. 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. 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. Connected dots show yearly values, dashed lines show 95% confidence interval. This explanation is less relevant for the slowing trends in continuous variables like BOD, fecal coliforms, or TSS. Panels A and B show different ranges of values on their y-axes. Graphs show coefficients on year-since-grant indicators from regressions corresponding to the specification of TableV, columns (2) and (4). It is possible that areas with more pollution data may be of greater interest; for example, FigureI, Panel C shows more monitoring sites in more populated areas. Public outcry over dirty rivers spurred Congress to pass the landmark Clean Water Act in 1972. A few pieces of evidence help evaluate the relevance of these issues. This does not seem consistent with our results because it would likely create pretrends in pollution or home values, whereas we observe none. For full access to this pdf, sign in to an existing account, or purchase an annual subscription. Municipal and grant costs are cumulative since 1970. It remains one of our nation's most vital safeguards for the health and safety of our communities and our environment. Notes. Notes. Provide federal assistance to control municipal discharges of wastewater. Iowa State and Center for Agricultural Research and Development. Current policy debates center on the uncertainty around wetland benefits. If sewer fees were particularly important, then one would expect rents to increase more than home values do; if anything, the estimates of TableV suggest the opposite. Cumulative grants include grants in all previous years, not only census years. Has Surface Water Quality Improved since the Clean Water Act? (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 Clean Water Act was passed by a bi-partisan vote in the early 1970s after decades of Congress trying unsuccessfully to get the states to clean up pollution in our nation's waterways. 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. Water Pollution Control Act 1948. 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. 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. We did not use these data because they focus on 1990 and later, mainly measure pesticides, and have a small sample. Notes. A review of 10 U.S. studies found pass-through estimates between 0.25 and 1.06 (Hines and Thaler 1995). In Panel A, the main explanatory variable excludes required municipal contributions, while Panel B includes them. This implies that coefficients in the graph can be interpreted as the pollution level in a given year, relative to the pollution level in the period before the treatment plant received a grant. 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. Asterisks denote p-value < .10 (*), < .05 (**), or < .01 (***). The Clean Water Act's grantmaking system creates higher costs than market-based regulations, argue Keiser and Shapiro. Flint potentially could have prevented these problems by adding corrosion inhibitors (like orthophosphate), which are used in many cities (including the Detroit water) that Flint previously used, at low cost. Analyses of the Clean Air Act relying solely on hedonic estimates generally have smaller cost-benefit ratios; the EPAs benefit numbers for air pollution rely heavily on estimated mortality impacts. Under the CWA, EPA has implemented pollution control programs such as setting wastewater standards for industry. Agricultural Sediment Control, Environmental Regulations, Air and Water Pollution, and Infant Mortality in India. Finally, we can recalculate the ratios in TableVI considering only subsets of costs. Notes. Standard errors are clustered by watershed. Our recreation data also represent all trips, and water-based recreation trips might require different travel distances. Cost-effective regulation equates marginal abatement costs across sources, which requires regulating all sources. 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. 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. In 2020 the EPA narrowed the definition of 'Waters of the United States', significantly limiting wetland protection under the Clean Water Act. Data include balanced panel of cities over 19702001, see text for details. Parts of the Clean Air Act use cap-and-trade systems, but nearly none of the Clean Water Act does. Most of the economic benefits (about 85 percent) are attributable to reductions in premature mortality associated with reductions in ambient particulate matter. We discuss a range of pass-through estimates including these for cost-effectiveness and cost-benefit analysis. We use the following equation to assess year-by-year changes in water pollution: \begin{equation} Secure .gov websites use HTTPS Its mission is to improve environmental, energy, and natural resource decisions through impartial economic research and policy engagement. Dissolved oxygen deficit equals 100 minus dissolved oxygen saturation, measured in percentage points. Row 7 equals row 1 divided by 30 times row 5, since it assumes water quality improvements accrue for 30years. E[G_{py}d_{d}\cdot \epsilon _{dpy}|X_{pdy}^{^{\,\,\prime }},\eta _{pd},\eta _{py},\eta _{dwy}]=0. Graphs show coefficients on downstream times year-since-grant indicators from regressions which correspond to the specification of TableII. Panel B analyzes how grants affect log mean rental values. Finally, we note one similarity between air and water pollution that may be relevant to policy design. See main text for description of dwelling and baseline covariates. 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. Primary focus: Establish cooperation between feds and states. In years before a grant, the coefficients are statistically indistinguishable from zero, have modest magnitude, and have no clear trend (FigureIII). Data cover 19622001. 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. 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. 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. Problem with enforcement. 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. The Clean Water Act of 1977 was an important and controversial environmental regulation the United States Congress had passed. JavaScript appears to be disabled on this computer. The 30-year duration of these benefits is also consistent with, though on the lower end of, engineering predictions. We assume that housing markets are competitive and that each consumer rents one house. 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. International Spillovers and Water Quality in Rivers: Do Countries Free Ride? Our finding that benefits last about as long as engineering estimates suggest (30years) and for only the expected pollutants also are not exactly what this story would predict. Online Appendix B.3 describes the rule we use to choose indicators for this list; it mainly reflects the pollutants used in the USEPAs (1974) first major water pollution report after the Clean Water Act. They then use the regression estimates from column (4) of TableV to calculate the ratio of the change in the value of housing and grant costs, separately by decile. Panel B shows no evidence that homes within 25 miles of the downstream river increase after a treatment plant receives a grant. Column (2) adds controls for dwelling characteristics, and for baseline covariates interacted with year fixed effects. The negatives is it is not strongly enforced, violators only pay a small fine, countries can exempt themselves from certain species. In 2020, the Clean Air Act Amendments will prevent over 230,000 early deaths. Year-by-year trends for the other pollutants in the main analysisthe share of waters that are not swimmable, BOD, fecal coliforms, and TSSshow similar patterns (Online Appendix FigureIII). Journal of the Association of Environmental and Resource Economists, Environmental Policy Choice: Pollution Abatement Subsidies, Water Pollution Policy. Pros of legalism are There were much fewer crimes in china and the laws. Overall, this evidence does not suggest dramatic heterogeneity in cost-effectiveness. Water is a critical source that is utilized by most living things on Earth to support it ways of live. Fourth, this analysis abstracts from general equilibrium changes. Using a national time series to evaluate the Clean Water Act could imply that it has been counterproductive, since the rate of decrease in pollution slowed after 1972. The point estimate implies that each grant decreases TSS by 1%, though this is imprecise. Third, these grants could lead to increased city taxes, sewer fees, or other local costs that depress home values. Ignoring such a large source of pollution can make aggregate abatement more costly. 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. 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. 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. Online Appendix F discusses other reasons we believe have weaker support. 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. TableIV reports estimates corresponding to equation (5). The Clean Water, Clean Air, and Green Jobs Bond Act will: Standard errors are clustered by city. 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 definition also includes standards for boating and drinking water that we do not analyze. 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. Effects of Clean Water Act Grants on Water Pollution: Event Study Graphs. Leads decrease of about 10% a year may be related to air pollution regulations, such as prohibiting leaded gasoline. 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 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, by contrast, mostly ignores nonpoint pollution sources like agriculture. 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. 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. We analyze all these physical pollutants in levels, though Online Appendix Tables III and VI show results also in logs. A second question is scope. Market-based instruments are believed to be more cost-effective than alternatives. Column (1) includes only plants analyzed in column (2) of TableII. Event study graphs for other pollutants are consistent with these results, but are less precise (Online Appendix FigureIV). 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|$\mathrm n$|). Effects of Clean Water Act Grants on Housing Demand. 1251 et seq. This article is published and distributed under the terms of the Oxford University Press, Standard Journals Publication Model (. \end{equation*}. Although a point estimate of 0.41 for the ratio of benefits to costs does not exceed 1, one should interpret this value in light of the discussion from the next subsection that it may be a lower bound on true benefits. 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. tipp city schools staff, how to fix err_http2_ping_failed, albert osborn contribution to forensic science,

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