Clean Air Act Essays | ipl.org The curve 1 describes the offer function of a firm, and 2 of another firm. 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. We use the following equation to assess year-by-year changes in water pollution: \begin{equation} Second, this city-level difference-in-differences estimate cannot use the upstream-downstream comparison for identification. Analysis includes homes within a given distance of downstream river segments. Data and code replicating tables and figures in this article can be found in Keiser and Shapiro (2018), in the Harvard Dataverse, doi:10.7910/DVN/2JRHN6. The Clean Water Act fight polluted water by adopting a strategy that targets point sources of water pollution. A third question involves substitution. JavaScript appears to be disabled on this computer. 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. A review of 10 U.S. studies found pass-through estimates between 0.25 and 1.06 (Hines and Thaler 1995). The Clean Air Act: Successes and Challenges Since 1970 Connected dots show yearly values, dashed lines show 95% confidence interval, and 1962 is the reference category. Pass-through of Grants to Municipal Sewerage Capital Spending. 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. The Truth About the Safe Drinking Water Act - Off The Grid News Effects of Clean Water Act Grants on Water Pollution: Event Study Graphs. 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. A blueprint for clean water everywhere, for everyone The cost-effectiveness estimates for fishable regressions are based on Online Appendix TableVI, row 13. Focus on balancing cost and health . The USEPAs (2000a) cost-benefit analysis of the Clean Water Act estimates that nonuse values are a sixth as large as use values. Ignoring such a large source of pollution can make aggregate abatement more costly. 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. The Clean Water Act, by contrast, mostly ignores nonpoint pollution sources like agriculture. Notes. Estimates come from regression specifications corresponding to TableV, columns (3) and (4). 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. Clean Water, Clean Air, and Green Jobs Environmental Bond Act of 2022 We also explored estimates controlling for city-year population or city-year municipal revenue. All results have been reviewed to ensure that no confidential information is disclosed. 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|$\mathrm n$|). 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. 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. FigureIV shows event study graphs, which suggest similar conclusions as these regressions. 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. 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 ." The Clean Water Act targets industry by focusing on the chemical aspects of polluted water. 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. 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. Data include balanced panel of cities over 19702001, see text for details. Benefits and Costs of the Clean Air Act | US EPA Others relate drinking water quality directly to health (Currie etal. It remains one of our nation's most vital safeguards for the health and safety of our communities and our environment. Point sources are discrete conveyances such as pipes or man-made ditches. Panel B shows no evidence that homes within 25 miles of the downstream river increase after a treatment plant receives a grant. 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. Notes. 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. 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). The point estimates imply that the benefits of the Clean Water Acts municipal grants exceed their costs if these unmeasured components of willingness to pay are three or more times the components of willingness to pay that we measure. The statistic we use reflects the binary cutoff of whether a majority of readings are fishable. 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. International Spillovers and Water Quality in Rivers: Do Countries Free Ride? 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. The Clean Water Act first appeared in American legislation in 1948 with the Federal Water Pollution Control Act. Problem with enforcement. 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. 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. However, it leaves it up to EPA. Panel A reports estimates of how grants affect log mean home values. 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. We interpret pre-1972 trends cautiously, however, because far fewer monitoring sites recorded data before the 1970s (Online Appendix TableI) and because the higher-quality monitoring networks (NAWQA, NASQAN, and HBN) focused their data collection after 1972. 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. First, people might have incomplete information about changes in water pollution and their welfare implications. Q_{pdy}=\gamma G_{py}d_{d}+X_{pdy}^{^{\,\,\prime }}\beta +\eta _{pd}+\eta _{py}+\eta _{dwy}+\epsilon _{pdy}. Environmental Bill: The Pros and Cons - The New York Times 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. Standard errors are clustered by watershed. GLS based on the number of underlying pollution readings in each plant downstream year is an efficient response to heteroskedasticity since we have grouped data. 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). Smith and Wolloh (2012) study one measure of pollution (dissolved oxygen) in lakes beginning after the Clean Water Act and use data from one of the repositories we analyze. 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. 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. For the few governments that do not report when their fiscal year ends, we assume they report by calendar year. Dependent variable mean describes mean in 19621972. Online Appendix E.2 investigates heterogeneity in grants effects on water pollution and cost-effectiveness. 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. 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. How the Clean Water Act Protects Your Rivers - American Rivers Paperless Cons. 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. $4.2 Billion Environmental Bond Act: What you should know Advantages and Disadvantages of Water Quality Data Submission Tools Column (4) reweights estimates using the inverse of the estimated propensity score for inclusion in the balanced panel of cities. 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. Wetlands, Flooding, and the Clean Water Act - Resources for the Future The Clean Water Act of 1977 was an important and controversial environmental regulation the United States Congress had passed. Notes. Twenty Years of the Clean Water Act: Has U.S. Water Quality Improved? In this sense, the existence of the Clean Water Act did crowd out aggregate municipal investment in wastewater treatment. \end{equation}, \begin{equation*} State Clean Water Administrators Release Clean Water Act Success 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. 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. 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. Each observation in the data is a pollution reading. What are pros and cons of legalism? The 30-year duration of these benefits is also consistent with, though on the lower end of, engineering predictions. The Clean Air Act is a United States federal law designed to control air pollution on a national level. 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}. 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. In 2020, the Clean Air Act Amendments will prevent over 230,000 early deaths. A few points are worth noting. Benefits and Costs of the Clean Air Act 1990-2020, the Second - US EPA Asterisks denote p-value < .10 (*), < .05 (**). We also report a range of sensitivity analyses, which are broadly in line with the main results. Federal spending grew to between |${\$}$|10 and |${\$}$|20 billion a year in the late 1970s. The tables separately list the different components of costs, and Section VII.C discusses possible effects of these costs on local taxes or fees. Fishable readings have BOD below 2.4mg/L, dissolved oxygen above 64% saturation (equivalently, dissolved oxygen deficits below 36%), fecal coliforms below 1,000 MPN/100mL, and TSS below 50mg/L. Column (2) adds controls for dwelling characteristics, and for baseline covariates interacted with year fixed effects. Dissolved oxygen deficit equals 100 minus dissolved oxygen saturation, measured in percentage points. Second, measuring cost-effectiveness is insufficient to reach conclusions about social welfare; Section VII discusses peoples value for these changes. Column (1) reports a basic difference-in-differences regression with nominal dollars. Provide federal assistance to control municipal discharges of wastewater. Research does find statistically significant but imperfect correlation between perceived local water pollution and objectively measured local water pollution (Faulkner etal. The annual cost to make a river-mile fishable ranges from |${\$}$|1.5 to |${\$}$|1.9 million.19, Cost-Effectiveness of Clean Water Act Grants (|${\$}$|2014 MN). In part for this reason, we focus on specifications including basin year fixed effects and the interaction of baseline characteristics with year fixed effects. Asterisks denote p-value < .10 (*), < .05 (**), or < .01 (***). Fourth, this analysis abstracts from general equilibrium changes. The Clean Water Act targets point sources like industry, municipal and state governments, and agriculture. Online Appendix FigureVII illustrates. Another test comes from the fact that the 19802000 gross rent data reported in the census include utilities costs. The Author(s) 2018. Third, if some grant expenditures were lost to rents (e.g., corruption), then those expenditures represent transfers and not true economic costs. The definition also includes standards for boating and drinking water that we do not analyze. Finally, we can recalculate the ratios in TableVI considering only subsets of costs. We considered a fourth repository, the Sustaining the Earths Watersheds: Agricultural Research Data System (STEWARDS), managed by the USDA. Estimates appear in Online Appendix TableVIII and discussion appears in Online Appendix E.3. Fecal coliforms had the fastest rate of decrease, at 2.5% a year. Pros of legalism are There were much fewer crimes in china and the laws. Column (3) adds river basin year fixed effects. Incomplete information would be especially important if pollution abatement improves health. Notably, almost half of this decline in state and local wastewater treatment capital spending occurred before the Clean Water Act. First, the analysis is based on only 198 cities. 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. The offer function is the firms isoprofit curve in the trade-off between home price and attribute j. 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 historic law was designed to protect all of our waters - from the smallest streams to the mightiest rivers - from pollution and destruction. One possible channel is that wages change to reflect the improvement in amenities (Roback 1982). A city may spend a grant in years after it is received, so real pass-through may be lower than nominal pass-through. Cropper and Oates (1992) describe the Clean Water Act as the only major environmental regulation of the 1970s and 1980s that does not have health as its primary goal. These regressions are described in equation (4) from the text. We also estimate linear water pollution trends using the following equation: \begin{equation} 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. Rows 2 and 3 are aggregated from GICS microdata. Online Appendix FigureV shows the effect of a grant by distance downstream from a treatment plant; few data are available to estimate effects separately for each five-mile bin along the river, and estimates are correspondingly less precise. 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. pH increased by 0.007pH units a year, meaning that waters became more basic (less acidic). The negatives is it is not strongly enforced, violators only pay a small fine, countries can exempt themselves from certain species. 5 Things To Know About NY's Clean Water, Air, And Green Jobs Bond Act The share of waters that are fishable has grown by 12 percentage points since the Clean Water Act. These effects grow in magnitude over the first 10 years, are statistically significant in this period, and remain negative for about 30years after a grant. The tablet dissolves into the liquid and releases some of the chemicals to purify the water instantly. *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. 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. Ninety-five percent confidence regions are in brackets. Hence our preferred housing estimates come from difference-in-differences regressions analyzing homes within a 25-mile radius of river segments that are downstream of treatment plants. Part I: State Pollution Control Programs, The Role of Water Quality Perceptions in Modelling Lake Recreation Demand, The International Handbook on Non-Market Environmental Valuation, The Displacement of Local Spending for Pollution Control by Federal Construction Grants, American Economic Review Papers and Proceedings, Water Pollution Progress at Borders: The Role of Changes in Chinas Political Promotion Incentives, American Economic Journal: Economic Policy, The Missing Benefits of Clean Water and the Role of Mismeasured Pollution Data, The Low but Uncertain Measured Benefits of US Water Quality Policy, Proceedings of the National Academy of Sciences, Replication Data for Consequences of the Clean Water Act and the Demand for Water Quality, Evaluating Public Programs with Close Substitutes: The Case of Head Start. Secure .gov websites use HTTPS Graphs show coefficients on downstream times year-since-grant indicators from regressions which correspond to the specification of TableII. The Clean Water Act and Water Pollution, VI. We find that by most measures, U.S. water pollution has declined since 1972, though some evidence suggests it may have declined at a faster rate before 1972. Effects of Clean Water Act Grants on Log Mean Home Values: Event Study Graphs. Muehlenbachs, Spiller, and Timmins (2015) relate fracking to home values and drinking water. Iowa State and Center for Agricultural Research and Development. First, this is the average cost to supply water quality via Clean Water Act grants; the marginal cost, or the cost for a specific river, may differ. 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. A few pieces of evidence help evaluate the relevance of these issues. We find some evidence that the net benefits of Clean Water Act grants vary over space in tandem with population density and the popularity of water-based recreation. 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%. Water Pollution Control Act 1948. Standard errors are clustered by city. We also observe that each additional grant results in further decreases in pollution (Online Appendix TableVI), which would be a complicated story for the timing of government human capital to explain. Data cover the years 19622001. Overall, this evidence does not suggest dramatic heterogeneity in cost-effectiveness. Graphs show coefficients on year-since-grant indicators from regressions corresponding to the specification of TableV, columns (2) and (4). We find suggestive evidence that ratios of measured benefits to costs follow sensible patterns, though not all estimates are precise. It furthers the University's objective of excellence in research, scholarship, and education by publishing worldwide, This PDF is available to Subscribers Only. Fecal coliforms are approximately log-normally distributed, and BOD and TSS are somewhat skewed (Online Appendix FigureI). This is potentially informative because increased taxes, sewer fees, or changes in other municipal expenditures are likely to be concentrated in the municipal authority managing the treatment plant, whereas the change in water quality is relevant for areas further downstream. We find large declines in most pollutants that the Clean Water Act targeted. These calculations use our regression estimates and the cost data. These estimates are even less positive than the estimates for housing. 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. 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. Dependent variable is municipal sewerage capital investment. The point estimate implies that each grant decreases TSS by 1%, though this is imprecise. A fourth question involves health. These full data show more rapid declines before 1972 than after it. Our interpretation is that once the Clean Water Act began, cities became less likely to spend municipal funds on wastewater treatment capital. We now compare the ratio of a grants effect on housing values (its measured benefits) to its costs. Each grant significantly decreased pollution for 25 miles downstream, and these benefits last for around 30years. Another possible channel involves ecology. 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. 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. 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 [1] It is one of the United States' first and most influential modern environmental laws, and one of the most comprehensive air quality laws in the world.