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This does not seem consistent with our results because it would likely create pretrends in pollution or home values, whereas we observe none. 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. Dependent variable mean describes mean in 19621972. One possible channel is that wages change to reflect the improvement in amenities (Roback 1982). Water Pollution Control Act 1948. 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. 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. Notes. Pass-through of Grants to Municipal Sewerage Capital Spending. Cost-effective regulation equates marginal abatement costs across sources, which requires regulating all sources. We also report event study graphs of outcomes relative to the year when a facility receives a grant: \begin{align} We impute these values from a panel regression of log mean home values on year fixed effects and tract fixed effects. 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. The historic law was designed to protect all of our waters - from the smallest streams to the mightiest rivers - from pollution and destruction. First, we limit regression estimates to the set of tracts reporting home values in all four years 1970, 1980, 1990, and 2000. 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. 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. 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|$\mathrm n$|). Data cover 19622001. Another test comes from the fact that the 19802000 gross rent data reported in the census include utilities costs. Independent evidence is generally consistent with this idea. 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. Asterisks denote p-value < .10 (*), < .05 (**). 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. The other pollutants decrease as wellBOD falls by about 2.4%, fecal coliforms fall by 3.6%, and the probability that downstream waters are not swimmable by about half a percentage point. 679 Words. Column (2) uses real dollars. Two studies report that concrete structures of treatment plants are expected to have a useful life of 50years, but mechanical and electrical components have a useful life of 1525years (USEPA 2002, 11; American Society of Civil Engineers 2011, 15). We find large declines in most pollutants that the Clean Water Act targeted. 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. Market-based instruments are believed to be more cost-effective than alternatives. 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). Related patterns have been found for air pollution, and suggest that allowing the stringency of pollution regulation to vary over space has potential to increase social welfare. 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 ." Fecal coliforms had the fastest rate of decrease, at 2.5% a year. The share of waters that are fishable has grown by 12 percentage points 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. However, it leaves it up to EPA. Lack civil or criminal penalties for violations. In 1969 Ohio's Cuyahoga River was so fouled by industrial pollution that the river caught on fire. 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. Under the CWA, EPA has implemented pollution control programs such as setting wastewater standards for industry. 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%. FigureIV shows event study graphs, which suggest similar conclusions as these regressions. 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. Nutrients were not targeted in the original Clean Water Act but are a focus of current regulation. The usage of water ranges from basic household needs to agricultural purposes. The basis of the CWA was enacted in 1948 and was called the Federal Water Pollution Control Act, but the Act was significantly reorganized and expanded in 1972. Our findings are consistent with these general conclusions. We assume that housing markets are competitive and that each consumer rents one house. It furthers the University's objective of excellence in research, scholarship, and education by publishing worldwide, This PDF is available to Subscribers Only. It may be useful to highlight differences in how the Clean Air and Clean Water Acts answer four important questions about environmental regulation. 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. We also explored estimates controlling for city-year population or city-year municipal revenue. 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. They suggest similar conclusions as Panels A and B. Annual cost to increase dissolved oxygen, Panel D: Log total value of housing stock, Copyright 2023 President and Fellows of Harvard College. Each grant significantly decreased pollution for 25 miles downstream, and these benefits last for around 30years. Panel B analyzes how grants affect log mean rental values. The Clean Water Act, by contrast, mostly ignores nonpoint pollution sources like agriculture. A .gov website belongs to an official government organization in the United States. A city may spend a grant in years after it is received, so real pass-through may be lower than nominal pass-through. Second, measuring cost-effectiveness is insufficient to reach conclusions about social welfare; Section VII discusses peoples value for these changes. These pass-through estimates also speak to the broader flypaper literature in public finance, so named to reflect its finding that federal government spending sticks where it hits. Researchers have estimated the pass-through of federal grants to local expenditure in education, social assistance, and other public services. Effects of Clean Water Act Grants on Log Mean Home Values: Event Study Graphs. These studies ask: 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. 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. The tables separately list the different components of costs, and Section VII.C discusses possible effects of these costs on local taxes or fees. Many travel demand papers use small surveys that report distance traveled to a specific lake or for a narrow region. Non-U.S. studies and more recent U.S. estimates find an even wider range (Gamkhar and Shah 2007). These regressions are described in equation (4) from the text. Before The Clean Water Act. 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. 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. 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. Hence decreases in acidic sulfur air pollution may have contributed to decreases in acidic water pollution. Most of the economic benefits (about 85 percent) are attributable to reductions in premature mortality associated with reductions in ambient particulate matter. The EPA did audit grants to minimize malfeasance. Grant project costs include federal grant amount and required local capital expenditure. Asterisks denote p-value < .10 (*), < .05 (**), or < .01 (***). 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. Dissolved oxygen deficit equals 100 minus dissolved oxygen saturation, measured in percentage points. Moreover, the share of industrial water discharge that was treated by some abatement technology grew substantially in the 1960s (U.S. Census Bureau 1971). 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. The Clean Water Act of 1977 was an important and controversial environmental regulation the United States Congress had passed. TableVI separately lists three types of costs: federal expenditures on capital, local expenditures on capital, and operation and maintenance costs. Q_{pdy}=\gamma G_{py}d_{d}+X_{pdy}^{^{\,\,\prime }}\beta +\eta _{pd}+\eta _{py}+\eta _{dwy}+\epsilon _{pdy}. 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. Fifth, the 25-mile radius is only designed to capture 95% of recreational trips. CBO (1985) dictates this time period because it provides the national total state and local spending data underlying this graph. Abstract. First is the choice of policy instrument. Row 4 is calculated following the method described in Online Appendix B.4. A review of 10 U.S. studies found pass-through estimates between 0.25 and 1.06 (Hines and Thaler 1995). Drinking water treatment falls under a separate set of regulations, the Safe Drinking Water Act. Alternatively, the most distant travelers might be marginal. Primary focus: Establish cooperation between feds and states. Adding rental units in column (3) barely changes this estimate. Column (2) adds controls for dwelling characteristics, and for baseline covariates interacted with year fixed effects. "Clean Water Act" became the Act's common name with amendments in 1972. 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). Surface waters, by contrast, are typically filtered through a drinking water treatment plant before people drink them. Fourth, this analysis abstracts from general equilibrium changes. Notes. Data cover decennial census years 19702000. This analysis, however, is subject to serious concerns about use and nonuse estimates in the underlying studies. Industrial Water Pollution in the United States: Direct Regulation or Market Incentive? But if local governments ultimately pay these costs, they could depress home values. One is to estimate hedonic regressions excluding housing units in the same city as the wastewater treatment plant. 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. In years before a grant, the coefficients are statistically indistinguishable from zero, have modest magnitude, and have no clear trend (FigureIII). These calculations use our regression estimates and the cost data. Twenty Years of the Clean Water Act: Has U.S. Water Quality Improved? 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. Clear protections mean cleaner water. \end{equation}, \begin{equation} 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). We calculate the present value of rental payouts as |$rentalPayout\frac{1-(1+r)^{-n}}{r}$|, where rentalPayout is the change in total annual rents due to the grants, r = 0.0785 is the interest rate, and n = 30 is the duration of the benefits in years. TableV analyzes how Clean Water Act grants affect housing. Sample size in all regressions is 6,336. 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 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. Event study graphs for other pollutants are consistent with these results, but are less precise (Online Appendix FigureIV). The 30-year duration of these benefits is also consistent with, though on the lower end of, engineering predictions. Adler Robert W., Landman Jessica C., Cameron Diane M.. Angrist Joshua D., Pischke Jrn-Steffen, Artell Janne, Ahtiainen Heini, Pouta Eija, , Boscoe Francis P., Henry Kevin A., Zdeb Michael S., , Carson Richard T., Mitchell Robert Cameron, , Currie Janet, Zivin Joshua Graff, Meckel Katherine, Neidell Matthew, Schlenker Wolfram, , Deschenes Olivier, Greenstone Michael, Shapiro Joseph S., , Faulkner H., Green A., Pellaumail K., Weaver T., , Gianessi Leonard P., Peskin Henry M., , Jeon Yongsik, Herriges Joseph A., Kling Catherine L., Downing John, , Kahn Matthew E., Li Pei, Zhao Kaxuan, , Keiser David A., Kling Catherine L., Shapiro Joseph S., , Kling Catherine L., Phaneuf Daniel J., Zhao Jinhua, , Leggett Christopher G., Bockstael Nancy E., , Lipscomb Molly, Mobarak Ahmed Mushfiq, , Muehlenbachs Lucija, Spiller Elisheba, Timmins Christopher, , Muller Nicholas Z., Mendelsohn Robert, , Muller Nicholas Z., Mendelsohn Robert, Nordhaus William, , Olmstead Sheila M., Muehlenbachs Lucija A., Shih Jhih-Shyang, Chu Ziyan, Krupnick Alan J., , Peiser Richard B., Smith Lawrence B., , Poor P. Joan, Boyle Kevin J., Taylor Laura O., Bouchard Roy, , Smith Richard A., Alexander Richard B., Wolman M. Gordon, , Smith V. Kerry, Wolloh Carlos Valcarcel, , Steinwender Astrid, Gundacker Caludia, Wittmann Karl J., , Wu Junjie, Adams Richard M., Kling Catherine L., Tanaka Katsuya, , Oxford University Press is a department of the University of Oxford. Our topic is clean water and sanitation. Most of these alternative approaches have similar sign, magnitude, and precision as the main results. Brackets show 95% confidence intervals. Each of the four pollutants which are part of these fishable and swimmable definitions declined rapidly during this period. Online Appendix E.2 investigates heterogeneity in grants effects on water pollution and cost-effectiveness. 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 Please click here to see any active alerts. The bottom decile of counties, for example, includes ratios of measured benefits to costs of below 0.01. 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. Column (3) include all homes within 1 mile, and column (4) includes homes within 25 miles. In the presence of such general equilibrium changes, our estimates could be interpreted as a lower bound on willingness to pay (Banzhaf 2015). The Clean Air Act is a United States federal law designed to control air pollution on a national level. Dependent variable is municipal sewerage capital investment. The Clean Water Act targets point sources like industry, municipal and state governments, and agriculture. Secure .gov websites use HTTPS First "water pollution control" legislation. 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. Asterisks denote p-value < .10 (*), < .05 (**), or < .01 (***). \end{equation}, Political Internalization of Economic Externalities and Environmental Policy, What Are Cities Worth? 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}. Rows 2 and 3 are aggregated from GICS microdata. Research does find statistically significant but imperfect correlation between perceived local water pollution and objectively measured local water pollution (Faulkner etal. 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. Official websites use .gov TableIII presents estimates of cost-effectiveness.

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