In part for this reason, we focus on specifications including basin year fixed effects and the interaction of baseline characteristics with year fixed effects. Clean Water Act Cons. Please click here to see any active alerts. This article assembles an array of new data to assess water pollutions trends, causes, and welfare consequences. Second, because the difference-in-differences specification used for home values does not use upstream areas as a counterfactual, it involves the stronger identifying assumption that areas with more and fewer grants would have had similar home price trends in the absence of the grants. We also estimate linear water pollution trends using the following equation: \begin{equation} \end{equation*}. 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. For water pollution, however, people can more easily substitute between nearby clean and dirty rivers for recreation. Panel B includes the local copayment, and finds pass-through rates of 0.84 to 0.93 in real terms or 1.09 in nominal terms. 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. Our topic is clean water and sanitation. It remains one of our nation's most vital safeguards for the health and safety of our communities and our environment. 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 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. 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. Temperature is increasing by about 1F per 40years, which is consistent with effects from climate change. V_{py}=\gamma G_{py}+X_{py}^{^{\,\,\prime }}\beta +\eta _{p}+\eta _{wy}+\epsilon _{py}. 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). The basis of the CWA was enacted in 1948 and was called the Federal Water Pollution Control Act, but the Act was significantly . The curve 2 describes the bid function for another type of consumer. 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. This early version of the CWA left sanitation planning up to the surgeon general, and allowed the Federal Works Administration to help local and state governments with prevention and cleanup efforts. As the modification to the Federal Pollution Control Act of 1972, the Clean Water Act of 1977 is the most important federal law that protects the sanitation of water, which includes lakes, rivers, and coastal areas. 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. These regressions are described in equation (4) from the text. Each of the four pollutants which are part of these fishable and swimmable definitions declined rapidly during this period. 2001; Steinwender, Gundacker, and Wittmann 2008; Artell, Ahtiainen, and Pouta 2013). Ninety-five percent confidence regions are in brackets. 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. Cost-effective regulation equates marginal abatement costs across sources, which requires regulating all sources. Connected dots show yearly values, dashed lines show 95% confidence interval, and 1962 is the reference category. The water can be sea water, sewage water or any other dirty water. Under the CWA, EPA has implemented pollution control programs such as setting wastewater standards for industry. Most of these estimates are small and actually negative. 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. Graphs show coefficients on year-since-grant indicators from regressions corresponding to the specification of TableV, columns (2) and (4). Adding population or city revenue controls to the specification of column (4) in TableIV gives estimates of 1.22 (0.30) or 0.91 (0.18) for Panel A, and 0.92 (0.22) or 0.68 (0.13) for Panel B. Finally, we average this ratio across plants in each county. Pass-through of Grants to Municipal Sewerage Capital Spending. 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. Current policy debates center on the uncertainty around wetland benefits. In Panel A, the main explanatory variable excludes required municipal contributions, while Panel B includes them. First, the analysis is based on only 198 cities. 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. A few notes are important for interpreting these statistics. 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. For the few governments that do not report when their fiscal year ends, we assume they report by calendar year. Search for other works by this author on: University of California, Berkeley and National Bureau of Economic Research. Data include decennial census years 19702000. When we fit the change in home values, we do so both for only the balanced panel of tract-years reporting home values, and for all tract-years. Clear protections mean cleaner water. Flint, Michigan, has recently had high lead levels in drinking water due to switching its water source from the Detroit River to the Flint River. It is interesting to consider possible explanations for these slowing trends. Water quality improvement and resilient infrastructure Not less than $650 million (increased by $100 million over 2020 proposal) wastewater infrastructure projects municipal stormwater projects Municipal grants for stormwater with green infrastructure Agricultural nutrient pollution Harmful Algal Bloom abatement Others relate drinking water quality directly to health (Currie etal. We also explored estimates controlling for city-year population or city-year municipal revenue. This article is published and distributed under the terms of the Oxford University Press, Standard Journals Publication Model (. All values in billions (|${\$}$|2014). Data cover decennial census years 19702000. 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 Clean Water Act targets point sources like industry, municipal and state governments, and agriculture. 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. Fourth, this analysis abstracts from general equilibrium changes. E[G_{py}d_{d}\cdot \epsilon _{dpy}|X_{pdy}^{^{\,\,\prime }},\eta _{pd},\eta _{py},\eta _{dwy}]=0. Effects of Clean Water Act Grants on Water Pollution. These estimates are within a standard deviation of one, so fail to reject the hypothesis that the municipal wastewater investment exactly equals the cost listed in the grant project data.20. FigureIV shows event study graphs, which suggest similar conclusions as these regressions. Abstract. Ignoring such a large source of pollution can make aggregate abatement more costly. 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. Column (3) include all homes within 1 mile, and column (4) includes homes within 25 miles. In years before a grant, the coefficients are statistically indistinguishable from zero, have modest magnitude, and have no clear trend (FigureIII). Standard errors are clustered by watershed. 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. 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