Diving Into the Benefits of the Clean Water Act

Since the passage of the Clean Water Act almost 50 years ago, the U.S. government has invested over $1 trillion to combat water pollution. The costs of the law seem relatively clear, but what about the benefits?

In a recent paper, David A. Keiser and Joseph S. Shapiro, take a deep dive into the benefits of the Clean Water Act. Keiser and Shapiro note that academics and regulators alike have debated whether the Clean Water Act has actually cleaned up the waters of the United States, and whether the benefits of the law have been worth the costs.

Although many U.S. rivers and streams do not meet federal pollution standards, Keiser and Shapiro write that the law has curbed water pollution overall. That said, the law has had relatively low net benefits—especially when compared to the federal Clean Air Act.

The U.S. Congress passed the Clean Water Act in 1972 to clean up the waters of the United States. Despite the law’s lofty goals, it stands out as one of the most controversial regulatory schemes in U.S. history, note Keiser and Shapiro, who are assistant professors at Iowa State University and the University of California, Berkeley, respectively.

Aiming to quantify the impact or lack thereof at the heart of the controversy, Keiser and Shapiro use what they call “the most comprehensive set of files ever compiled in academic or government on water pollution” to make three findings about the value of the Clean Water Act.

First, Keiser and Shapiro find that most forms of water pollution have decreased since the Clean Water Act’s passage. In fact, between the law’s enactment and 2001, waters suitable for fishing have increased by 12 percent.

Second, Keiser and Shapiro find that the Clean Water Act has contributed to decreased levels of water pollution through its grantmaking program, which has enabled many local governments to clean up their water sources by funding the creation and improvement of municipal wastewater plants and sewer systems. Each grant, they note, lowers the chance that the plant’s downriver waters violate fishability standards by half a percentage point.

Furthermore, each grant decreases indicators of polluted water. For instance, oxygen deficits, which indicate that pollution has impaired the water’s ability to support aquatic life, and fecal matter, which indicates that pathogens that cause disease may be present, decreased by 0.7 percent and 3.6 percent respectively.

Third, despite the law’s effectiveness in combatting water pollution, only minimal evidence exists to indicate that residents who live near affected water bodies value the Clean Water Act’s grantmaking program. Moreover, the positive effects of federal grants on home values, Keiser and Shapiro find, are only around 25 percent of the costs of each grant. Specifically, for the average grant allotment of $32 million, Keiser and Shapiro find that the values of houses near affected bodies of water rose by only $7 million.

Overall, the Clean Water Act has had relatively low net benefits, Keiser and Shapiro argue, especially when compared to the Clean Air Act.

The Clean Water Act’s grantmaking system creates higher costs than market-based regulations, argue Keiser and Shapiro. 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. On the other hand, the Clean Air Act relies in part on emissions trading, a permitting system that allows private companies to buy and sell the ability to pollute. Because emissions trading does not require significant government expenditures, the Clean Water Act operates at a higher cost to the government than does the Clean Air Act.

In addition, the Clean Water Act does not regulate some examples of “low-hanging fruit” that would be relatively inexpensive to control, like water pollution from agriculture. On the other hand, the Clean Air Act covers virtually all major sources of pollution, so the benefits are relatively high compared to the costs.

The fact that the public generally has access to multiple sources of water also limits the benefits of the Clean Water Act compared to the Clean Air Act, explain Keiser and Shapiro. The value to residents of clean water lessens when they have alternative drinking water and recreational waters available nearby. In addition, Keiser and Shapiro suggest that technological advances, such as filtering devices, allow residents to treat their water individually. But because everyone breathes unfiltered air, Keiser and Shapiro argue, the Clean Air Act’s benefits to the public health are much higher and starker than the benefits of the Clean Water Act.

Ultimately, Keiser and Shapiro portray a rather dismal picture of the net benefits of the Clean Water Act. Still, former U.S. Environmental Protection Agency Administrator William Ruckelshaus may have had a point when he observed that, “even if all of our waters are not swimmable or fishable, at least they are not flammable.”