The negatives is it is not strongly enforced, violators only pay a small fine, countries can exempt themselves from certain species. Another possible channel involves ecology. Online Appendix E.2 discusses how cost-effectiveness numbers change with alternative estimates of crowding out.22. For instance, the Clean Water Act's grantmaking program has cost the U.S. government about $650 billion total, or about $1.5 million per year to make one mile of river fishable. The Clean Water Act targets industry by focusing on the chemical aspects of polluted water. However, it leaves it up to EPA. A fourth question involves health. Primary focus: Establish cooperation between feds and states. Our topic is clean water and sanitation. Online Appendix F discusses other reasons we believe have weaker support. Lack civil or criminal penalties for violations. 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. WHAT'S AT STAKE? 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. 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. We estimate many sensitivity analyses, including restricting to high-quality subsamples of the data, adding important controls, weighting by population, and many others. This article assembles an array of new data to assess water pollutions trends, causes, and welfare consequences. The increases are small and statistically insignificant in most years. 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. Column (1) reports a basic difference-in-differences regression with nominal dollars. Annual cost to increase dissolved oxygen, Panel D: Log total value of housing stock, Copyright 2023 President and Fellows of Harvard College. Effects of Clean Water Act Grants on Water Pollution: Event Study Graphs. These controls could help address possible omitted variables bias due to city growth in these difference-in-differences regressions, but are potentially a case of bad controls (Angrist and Pischke 2009) because they could be affected by grants. We thank the editor, Larry Katz, along with four referees, Joe Altonji, Josh Angrist, David Autor, Richard Carson, Lucas Davis, Esther Duflo, Eli Fenichel, Michael Greenstone, Catherine Kling, Arik Levinson, Matt Kotchen, Amanda Kowalski, Rose Kwok, Drew Laughland, Neal Mahone, Enrico Moretti, Bill Nordhaus, Sheila Olmstead, Jordan Peccia, Nick Ryan, Daniel Sheehan, Kerry Smith, Richard Smith, Rich Sweeney, Reed Walker, and participants in many seminars for excellent comments; Randy Becker, Olivier Deschenes, Michael Greenstone, and Jon Harcum for sharing data; Elyse Adamic, Todd Campbell, Adrian Fernandez, Ryan Manucha, Xianjun Qiu, Patrick Reed, Vivek Sampathkumar, Daisy Sun, Trevor Williams, and Katherine Wong for excellent research assistance; and Bob Bastian and Andy Stoddard for explaining details of the Clean Water Act. Q_{pdy}=\gamma G_{py}d_{d}+X_{pdy}^{^{\,\,\prime }}\beta +\eta _{pd}+\eta _{py}+\eta _{dwy}+\epsilon _{pdy}. 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. Iowa State and Center for Agricultural Research and Development. Many travel demand papers use small surveys that report distance traveled to a specific lake or for a narrow region. In the presence of such rents, this analysis could be interpreted as a cost-effectiveness analysis from the governments perspective. Journal of the Association of Environmental and Resource Economists, Environmental Policy Choice: Pollution Abatement Subsidies, Water Pollution Policy. Third, if some grant expenditures were lost to rents (e.g., corruption), then those expenditures represent transfers and not true economic costs. Because water pollution flows in a known direction, areas upstream of a treatment plant provide a natural counterfactual for areas downstream of a plant. 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. We discuss a range of pass-through estimates including these for cost-effectiveness and cost-benefit analysis. The positive coefficients in the richer specifications of columns (2) through (4) are consistent with increases in home values, though most are statistically insignificant. 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. Search for other works by this author on: University of California, Berkeley and National Bureau of Economic Research. Parts of the Clean Air Act use cap-and-trade systems, but nearly none of the Clean Water Act does. The Clean Water, Clean Air, and Green Jobs Bond Act will: Clear protections mean cleaner water. The Clean Water Act's grantmaking system creates higher costs than market-based regulations, argue Keiser and Shapiro. Nutrients were not targeted in the original Clean Water Act but are a focus of current regulation. Implemented in response to growing public awareness and concern for controlling water pollution in the U.S., the Clean Water Act followed the establishment of the Environmental Protection Agency (EPA) and the passage of the Clean Air Act in 1970, and preceded the Endangered Species Act of 1973, making it part of a period of landmark . These calculations use our regression estimates and the cost data. 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. 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. Federal spending grew to between |${\$}$|10 and |${\$}$|20 billion a year in the late 1970s. Fourth, this analysis abstracts from general equilibrium changes. saturation increase/10, 7. The simplest specification of column (1), which includes rivers with water quality data, implies that it cost |${\$}$|0.67 million a year to increase dissolved oxygen saturation in a river-mile by 10%; the broadest specification of column (3), which assumes every treatment plant has 25 miles of downstream waters affected, implies that it cost |${\$}$|0.53 million a year. Panel B analyzes how grants affect log mean rental values. 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. Row 7 equals row 1 divided by 30 times row 5, since it assumes water quality improvements accrue for 30years. 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. We did not use these data because they focus on 1990 and later, mainly measure pesticides, and have a small sample. Log specifications would implicitly assume that the percentage change in a rivers pollution due to a grant is the same for a river with a high background concentration, which is unlikely. We find suggestive evidence that ratios of measured benefits to costs follow sensible patterns, though not all estimates are precise. Paperless Cons. This implies that the marginal implicit price of an amenity at a given point on the hedonic price schedule equals the marginal willingness to pay of the consumer who locates on that point of the hedonic price schedule. 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. Asterisks denote p-value < .10 (*), < .05 (**). Hence decreases in acidic sulfur air pollution may have contributed to decreases in acidic water pollution. Independent evidence is generally consistent with this idea. 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. In 1969 Ohio's Cuyahoga River was so fouled by industrial pollution that the river caught on fire. The curve 1 describes the offer function of a firm, and 2 of another firm. 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. For the few governments that do not report when their fiscal year ends, we assume they report by calendar year. The Author(s) 2018. Effects of Clean Water Act Grants on Log Mean Home Values: Event Study Graphs. Ninety-five percent confidence regions are in brackets. Some nutrients like ammonia and phosphorus are declining, while others like nitrates are unchanged. 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. This implies that pollution levels in upstream and downstream waters had similar trends before grants were received. Sample size in all regressions is 6,336. Second, measuring cost-effectiveness is insufficient to reach conclusions about social welfare; Section VII discusses peoples value for these changes. 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. Column (1) includes only plants analyzed in column (2) of TableII. It furthers the University's objective of excellence in research, scholarship, and education by publishing worldwide, This PDF is available to Subscribers Only. These regressions are described in equation (4) from the text. For water pollution, however, people can more easily substitute between nearby clean and dirty rivers for recreation. Point sources are discrete conveyances such as pipes or man-made ditches. The health of many aquatic species (so indirectly, the benefit people derive from a river) may depend nonlinearly on the area of clean water. Column (3) include all homes within 1 mile, and column (4) includes homes within 25 miles. 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. 1251 et seq. 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. 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$|).
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