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The Low but Uncertain Measured Benefits of US Water Quality Policy

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  • Shapiro, Joseph S

Abstract

U.S. investment to decrease pollution in rivers, lakes, and other surface waters has exceeded $1.9 trillion since 1960, and has also exceeded the cost of most other U.S. environmental initiatives. These investments come both from the 1972 Clean Water Act and the largely voluntary efforts to control pollution from agriculture and urban runoff. This paper reviews the methods and conclusions of about 20 recent evaluations of these policies. Surprisingly, most analyses estimate that these policies’ benefits are much smaller than their costs; the benefit/cost ratio from the median study is 0.37. Yet existing evidence is limited and undercounts many types of benefits. We conclude that it is unclear whether many of these regulations truly fail a benefit/cost test or whether existing evidence understates their net benefits; we also describe specific questions that when answered would help eliminate this uncertainty.

Suggested Citation

  • Shapiro, Joseph S, 2018. "The Low but Uncertain Measured Benefits of US Water Quality Policy," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt2qq4d7vn, Department of Agricultural & Resource Economics, UC Berkeley.
  • Handle: RePEc:cdl:agrebk:qt2qq4d7vn
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    References listed on IDEAS

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    1. McGartland, Al, 2013. "Thirty Years of Economics at the Environmental Protection Agency," Agricultural and Resource Economics Review, Cambridge University Press, vol. 42(3), pages 436-452, December.
    2. Robert W. Hahn & Patrick M. Dudley, 2007. "How Well Does the U.S. Government Do Benefit-Cost Analysis?," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 1(2), pages 192-211, Summer.
    3. Sheila M. Olmstead, 2010. "The Economics of Water Quality," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 4(1), pages 44-62, Winter.
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    Cited by:

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    2. Cassidy, Alecia & Meeks, Robyn C. & Moore, Michael R., 2023. "Cleaning up the Great Lakes: Housing market impacts of removing legacy pollutants," Journal of Public Economics, Elsevier, vol. 226(C).
    3. Weng, Weizhe & Cobourn, Kelly M. & Kemanian, Armen R. & Boyle, Kevin J. & Shi, Yuning & Stachelek, Joseph & White, Charles, 2020. "Quantifying Co-Benefits of Water Quality Policies: An Integrated Assessment Model of Nitrogen Management," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304667, Agricultural and Applied Economics Association.
    4. Melstrom, Richard T., 2022. "Residential demand for sediment remediation to restore water quality: Evidence from Milwaukee," Journal of Environmental Economics and Management, Elsevier, vol. 116(C).
    5. Melstrom, Richard T., 2022. "Residential demand for sediment remediation to restore water quality: Evidence from Milwaukee," Journal of Environmental Economics and Management, Elsevier, vol. 116(C).
    6. Ren, Qianping & West, Jeremy, 2023. "Cleaner waters and urbanization," Journal of Environmental Economics and Management, Elsevier, vol. 122(C).
    7. Hill, Elaine L. & Ma, Lala, 2022. "Drinking water, fracking, and infant health," Journal of Health Economics, Elsevier, vol. 82(C).
    8. Lopamudra Chakraborti, 2021. "Impact of upstream plant level pollution on downstream water quality: evidence from the clean water act," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 64(3), pages 517-535, February.
    9. Kuwayama, Yusuke & Olmstead, Sheila & Zheng, Jiameng, 2022. "A more comprehensive estimate of the value of water quality," Journal of Public Economics, Elsevier, vol. 207(C).
    10. Shr, Yau-Huo Jimmy & Zhang, Wendong, 2021. "Does Omitting Downstream Water Quality Change the Economic Benefits of Nutrient Reduction Programs: Evidence from a Discrete Choice Experiment," 2021 Annual Meeting, August 1-3, Austin, Texas 313927, Agricultural and Applied Economics Association.
    11. Flynn, Patrick & Smith, Tucker, 2022. "Rivers, lakes and revenue streams: The heterogeneous effects of Clean Water Act grants on local spending," Journal of Public Economics, Elsevier, vol. 212(C).
    12. Yau-Huo Shr & Wendong Zhang, 2021. "Does Omitting Downstream Water Quality Change the Economic Benefits of Nutrient Reduction? Evidence from a Discrete Choice Experiment," Center for Agricultural and Rural Development (CARD) Publications 21-wp620, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    13. Xu, Yuelu & Elbakidze, Levan, 2021. "Integrated assessment of N runoff in the Gulf of Mexico: an application of spatially explicit partial equilibrium and HAWQS models," 2021 Annual Meeting, August 1-3, Austin, Texas 313917, Agricultural and Applied Economics Association.

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    Keywords

    Social and Behavioral Sciences; Water pollution; Clean Water Act; cost-benefit analysis; cost-effectiveness analysis; environmental regulation;
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