Overall, this evidence does not suggest dramatic heterogeneity in cost-effectiveness. Column (3) adds river basin year fixed effects. 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. Nutrients were not targeted in the original Clean Water Act but are a focus of current regulation. N1 - Macroeconomics and Monetary Economics; Industrial Structure; Growth; N3 - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and, N4 - Government, War, Law, International Relations, and, N5 - Agriculture, Natural Resources, Environment, and Extractive, N7 - Transport, Trade, Energy, Technology, and Other, O - Economic Development, Innovation, Technological Change, and, O3 - Innovation; Research and Development; Technological Change; Intellectual Property, Q - Agricultural and Natural Resource Economics; Environmental and Ecological, R - Urban, Rural, Regional, Real Estate, and Transportation, R3 - Real Estate Markets, Spatial Production Analysis, and Firm, Z1 - Cultural Economics; Economic Sociology; Economic, II. Second, due to nonuse or existence values, a person may value a clean river even if they never visit or live near that river. Each grant significantly decreased pollution for 25 miles downstream, and these benefits last for around 30years. \end{equation}, Political Internalization of Economic Externalities and Environmental Policy, What Are Cities Worth? Data include balanced panel of cities over 19702001, see text for details. 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. Current policy debates center on the uncertainty around wetland benefits. 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. 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. Panel B analyzes how grants affect log mean rental values. Dissolved oxygen deficits and the share of waters that are not fishable both decreased almost every year between 1962 and 1990 (FigureII). 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. Fecal coliforms are approximately log-normally distributed, and BOD and TSS are somewhat skewed (Online Appendix FigureI). This analysis, however, is subject to serious concerns about use and nonuse estimates in the underlying studies. Panels A and B reflect the classic hedonic model, with fixed housing stock. 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. "Clean Water Act" became the Act's common name with amendments in 1972. 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. 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. Twenty Years of the Clean Water Act: Has U.S. Water Quality Improved? Federal spending grew to between |${\$}$|10 and |${\$}$|20 billion a year in the late 1970s. Incomplete information would be especially important if pollution abatement improves health. Muehlenbachs, Spiller, and Timmins (2015) relate fracking to home values and drinking water. The Clean Water Act fight polluted water by adopting a strategy that targets point sources of water pollution. Under the CWA, EPA has implemented pollution control programs such as setting wastewater standards for industry. 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. Moreover, the share of industrial water discharge that was treated by some abatement technology grew substantially in the 1960s (U.S. Census Bureau 1971). Agricultural Sediment Control, Environmental Regulations, Air and Water Pollution, and Infant Mortality in India. Time of day controls are a cubic polynomial in hour of day. In 2020, the Clean Air Act Amendments will prevent over 230,000 early deaths. 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. Cumulative grants include grants in all previous years, not only census years. The estimate in column (4), including homes within a 25-mile radius of downstream rivers, is small and statistically insignificant but actually negative. Online Appendix FigureVII illustrates. 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). Notes. Most others are statistically indistinguishable from the mean grant, though there is some moderate (if statistically insignificant) heterogeneity in point estimates. For example, the USEPAs (2000a,b) estimate of the benefit/cost ratio of the Clean Water Act is below 1, though the EPAs preferred estimate of the benefit/cost ratio of the Clean Air Act is 42 (USEPA 1997).28. 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. Event study graphs for other pollutants are consistent with these results, but are less precise (Online Appendix FigureIV). The point estimate implies that each grant decreases TSS by 1%, though this is imprecise. Each observation in a regression is a plant-downstream-year tuple. The 0.25- or 1.0-mile estimates are slightly larger, which is consistent with the idea that residents nearer to the river benefit more from water quality. Primary focus: Establish cooperation between feds and states. Notes. Another is that fishable and swimmable are limited between 0 and 1, and dissolved oxygen saturation does not much exceed 100%. The clean water act is making sure every person has clean water to drink. We now compare the ratio of a grants effect on housing values (its measured benefits) to its costs. Row 7 equals row 1 divided by 30 times row 5, since it assumes water quality improvements accrue for 30years. 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. This explanation is less relevant for the slowing trends in continuous variables like BOD, fecal coliforms, or TSS. 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. For full access to this pdf, sign in to an existing account, or purchase an annual subscription. 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. The Clean Water Act (CWA) contains a number of complex and interrelated elements of overall water quality management. Column (1) includes only plants analyzed in column (2) of TableII. Regulating Untaxable Externalities: Are Vehicle Air Pollution Standards Effective and Efficient? Paperless Cons. Column (1) reports a basic difference-in-differences regression with nominal dollars. The product is a tablet that turns any type of substance into clean substance. River miles * pct. The curve 2 describes the bid function for another type of consumer. The Clean Water Act first appeared in American legislation in 1948 with the Federal Water Pollution Control Act. Secure .gov websites use HTTPS Independent evidence is generally consistent with this idea. In Panel B, the year variables are recentered around 1972. 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. We assume that housing markets are competitive and that each consumer rents one house. The positives of the Lacey Act it is one of . 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. Our approach focuses on the effects of cleaning up an individual site and is not as well suited to capture the potentially distinct effects of cleaning up entire river systems. Hence decreases in acidic sulfur air pollution may have contributed to decreases in acidic water pollution. After 1990, the trends approach zero. Data cover the years 19622001. TableII shows that these grants cause large and statistically significant decreases in pollution. The National Survey of Recreation and the Environment and its predecessor, the National Recreation Survey, do not systematically summarize trips taken and travel distances. 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. Municipal spending data from Annual Survey of Governments and Census of Governments. 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. Other sources note that these time series trends are consistent with aggregate crowding out (Jondrow and Levy 1984; CBO 1985).
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