The Low but Uncertain Measured Benefits of US Water Quality Policy

Keiser, David A., Catherine L. Kling, and Joseph S. Shapiro. 2018. “The Low but Uncertain Measured Benefits of US Water Quality Policy.” Proceedings of the National Academy of Sciences 116(12): 5262-5269.

29 Pages Posted: 1 Jun 2020

See all articles by David Keiser

David Keiser

Resource Economics

Catherine L. Kling

Iowa State University - Center for Agriculture and Rural Development (CARD)

Joseph S. Shapiro

University of California, Berkeley; National Bureau of Economic Research (NBER)

Date Written: September 2018

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.

Keywords: Water Pollution; Clean Water Act; Cost-Benefit Analysis; Cost-Effectiveness Analysis; Environmental Regulation

JEL Classification: H23; H54; H70; Q50; R31

Suggested Citation

Keiser, David and Kling, Catherine L. and Shapiro, Joseph S., The Low but Uncertain Measured Benefits of US Water Quality Policy (September 2018). Keiser, David A., Catherine L. Kling, and Joseph S. Shapiro. 2018. “The Low but Uncertain Measured Benefits of US Water Quality Policy.” Proceedings of the National Academy of Sciences 116(12): 5262-5269. , Available at SSRN: https://ssrn.com/abstract=3310251

David Keiser (Contact Author)

Resource Economics ( email )

Resource Economics
UMass
Amherst, MA 01003
United States

Catherine L. Kling

Iowa State University - Center for Agriculture and Rural Development (CARD) ( email )

Ames, IA 50011
United States

Joseph S. Shapiro

University of California, Berkeley ( email )

HOME PAGE: http://joseph-s-shapiro.com

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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