Skip to main content Accessibility help
×
Home
Hostname: page-component-544b6db54f-prt4h Total loading time: 0.236 Render date: 2021-10-23T21:41:50.019Z Has data issue: true Feature Flags: { "shouldUseShareProductTool": true, "shouldUseHypothesis": true, "isUnsiloEnabled": true, "metricsAbstractViews": false, "figures": true, "newCiteModal": false, "newCitedByModal": true, "newEcommerce": true, "newUsageEvents": true }

Achieving Economically Feasible Drinking Water Regulation

Published online by Cambridge University Press:  25 June 2020

Richard B. Belzer*
Affiliation:
Independent Consultant, PO Box 319, Mt Vernon, VA22121, USA, e-mail: rbbelzer@post.harvard.edu

Abstract

United States Environmental Protection Agency (USEPA) has regulated drinking water since the 1974 Safe Drinking Water Act (SDWA). Congress directed it to achieve three conflicting goals: (i) establish stringent nationwide standards, (ii) ensure that these standards are both technologically and economically feasible, and (iii) accommodate significant differences in cost among water systems of different sizes with different water sources. USEPA chose to emphasize goal (i) at the expense of (ii) and (iii). In 1986, Congress intensified its preference for (i), was silent concerning goal (ii), and criticized USEPA for failing to achieve goal (iii). In lieu of economic feasibility, the Agency substituted “affordability,” defined as expenditures up to 2.5 % of national median household income irrespective of the benefits. This imposed deadweight losses, and substantial inequities on rural areas, low-income communities, and low-income households generally. In 1996, Congress directed USEPA to use benefit-cost analysis positively and normatively. Regulations issued since 1996 do not appear to comply, however. A review of post-1996 drinking water standards indicates that most were certified by USEPA as having benefits that justified costs, but these determinations were unsupported by the Agency’s own regulatory impact analyses. This article proposes that USEPA define by regulation that “economic feasibility” means marginal benefits exceed marginal costs for the smallest water system subject to SDWA, and that all future drinking water standards must be economically feasible. Economic efficiency would be greatly enhanced and the pervasive inequities of “affordability” greatly diminished. Unlike “affordability,” this definition is objective and compatible with lay intuition about the meaning of key regulatory terms.

Type
Article
Copyright
© Society for Benefit-Cost Analysis 2020

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Abernethy, J., Chojnacki, A., Farahi, A., Schwartz, E., and Webb, J. 2018. “ActiveRemediation: The Search for Lead Pipes in Flint, Michigan.” In Proceedings of the 24th ACM SIGKDD International Conference on Knowledge Discovery & Data Mining, August 19-23, London, UK, 514.Google Scholar
American Water Works Association. 2012. Buried No Longer: Confronting America’s Water Infrastructure Challenge. Washington, DC: AWWA.Google Scholar
Berahzer, S. 2012. “The Increasing Need to Address Customer Affordability.” In Environmental Finance Blog, Vol. 2018. Chapel Hill, NC: UNC Environmental Finance Center.Google Scholar
Burnett, J. K., and Hahn, R. W. 2001a. EPA’s Arsenic Rule: The Benefits of the Standard Do Not Justify the Costs. Washington, DC: AEI-Brookings Joint Center for Regulatory Studies.Google Scholar
Burnett, J. K., and Hahn, R. W. 2001b. “A Costly Benefit: Economic Analysis Does Not Support EPA’s New Arsenic Rule.” Regulation, 24 (Fall): 4449.Google Scholar
CMTA et al. v. SWRCB. 2017. Docket No. 34-2015-80001850 (Superior Court, Sacramento County, CA), May 5.Google Scholar
Cory, D.C., Taylor, L. D. 2017. “On the Distributional Implications of Safe Drinking Water Standards.” Journal of Benefit-Cost Analysis, 8: 4990.10.1017/bca.2017.2CrossRefGoogle Scholar
Council on Wage and Price Stability. 1978. Comments Submitted to the Enviornmental Protection Agency on the Proposed Drinking Water Regulations. Washington, DC: Council on Wage and Price Stability.Google Scholar
Crawford-Brown , D., Raucher, R., Rubin, S., Lawson, M. 2009. Risk Trade-offs in Public Health when Water Prices Rise: The Implications for Small Community Supplies. Washington, DC: National Water Resources Association.Google Scholar
Czerwinski, S. J., Fretwell, E., Fosler, R. S., Lindsey, G., and Pagano, M. A. (2018). Developing a New Framework for Community Affordability of Clean Water Services. Washington DC: National Academy of Public Administration.Google Scholar
Eskaf, S. 2013. “Percent MHI as an Indicator of Affordability of Residential Rates: Using the U.S. Census Bureau’s Median Household Income Data.” In Environmental Finance Blog, Vol. 2018. Chapel Hill, NC: UNH Environmental Finance Center.Google Scholar
Frey, M. M., Chwirka, J., Narasimhan, R., Kommineni, S., Chowdhury, Z. 2000. Update: Cost Implications of a Lower Arsenic MCL. Denver, CO: AWWA Research Foundation.Google Scholar
Frey, M. M., Owen, D. M., Chowdhury, Z. K., Raucher, R. S., Edwards, M. A. 1998. “Cost to Utilities of a Lower MCL for Arsenic.” Journal ‑ American Water Works Association, 90(March ): 89102.10.1002/j.1551-8833.1998.tb08401.xCrossRefGoogle Scholar
Frost, F. J., Tollestrup, K., Craun, G. F., Raucher, R., Stomp, J., Chwirka, J. 2002. “Evaluation of Costs and Benefits of a Lower Arsenic MCL.” Journal ‑ American Water Works Association, 94(March ): 7180.10.1002/j.1551-8833.2002.tb09435.xCrossRefGoogle Scholar
Gingerich, D. B., Sengupta, A., Barnett, M. O. 2017. “Is the Arsenic Rule Affordable?Journal ‑ American Water Works Association, 109(September ): E381E392.10.5942/jawwa.2017.109.0086CrossRefGoogle Scholar
Gore, A. Jr. 1993. From Red Tape to Results: Creating a Government That Works Better and Costs Less: Report of the National Performance Review. Washington, DC: National Performance Review.Google Scholar
Gore, A. Jr. 1994. Creating a Government that Works Better and Costs Less: Status Report. Washington DC: National Performance Review.Google Scholar
Gurian, P. L., Small, M. J., Lockwood, J. R., Schervish, M. J. 2001. “Benefit‐Cost Estimation for Alternative Drinking Water Maximum Contaminant Levels.” Water Resources Research, 37: 22132226.10.1029/2000WR900387CrossRefGoogle Scholar
Hilkert Colby, E. J., Young, T. M., Green, P. G., Darby, J. L. 2010. “Costs of Arsenic Treatment for Potable Water in California and Comparison to US Environmental Protection Agency Affordability Metrics.” Journal of the American Water Resources Association, 46(December ): 12381254.10.1111/j.1752-1688.2010.00488.xCrossRefGoogle Scholar
Irvin, D. 2017. “Is Percent MHI the Best Way to Measure Affordability?” In Environmental Finance Blog, Vol. 2018. Chapel Hill, NC: UNC Environmental Finance Center.Google Scholar
Keeney, R. L. 1990. “Mortality Risks Induced by Economic Expenditures.” Risk Analysis, 10: 147159.10.1111/j.1539-6924.1990.tb01029.xCrossRefGoogle ScholarPubMed
Keeney, R. L. 1994. “Mortality Risks Induced by the Costs of Regulations.” Journal of Risk and Uncertainty, 8: 95110.Google Scholar
Lado, M. E. 2017. “Toward Civil Rights Enforcement in the Environmental Justice Context: Step One: Acknowledging the Problem.” Fordham Environmental Law Review 29: 1.Google Scholar
Lutter, R, Morrall, JF. III 1994. Health-Health Analysis: A New Way to Evaluate Health and Safety Regulation. Journal of Risk and Uncertainty, 8: 43-66.10.1007/BF01064085CrossRefGoogle Scholar
Lutter, R, Morrall, JF, Viscusi, WK 1999. The Cost‐per‐Life‐Saved Cutoff for Safety‐Enhancing Regulations. Economic Inquiry 37:599-608.10.1111/j.1465-7295.1999.tb01450.xCrossRefGoogle Scholar
Morrall, J. F. III. 1986. “A Review of the Record.” Regulation, 10: 2534.Google Scholar
Office of Management and Budget. 1991. “Regulating Risk: The Cost-Effectiveness of Federal Efforts to Reduce Health and Safety Risks.” In Regulatory Program of the United States Government; April 1, 1991–March 31, 1992. Washington, DC: OMB, 816.Google Scholar
Okun, A. 1975. Efficiency and Equity: The Big Tradeoff. Washington, DC: Brookings Institution.Google Scholar
Peltzman, S. 1975. “The Effects of Automobile Safety Regulation.” Journal of Political Economy, 83: 49.10.1086/260352CrossRefGoogle Scholar
Raucher, R. S. 2003. “Benefit-Cost Analysis and Drinking Water Regulation.” In Drinking Water Regulation and Health, edited by Pontius, F. W., 225250. Lakewood, CO: Wiley-Interscience .CrossRefGoogle Scholar
Raucher, R. S., Cromwell, J. 2004. “Safe Drinking Water Act: Costs of Compliance.” Working Paper 35. Arlington, VA: GMU Mercatus Center.Google Scholar
Raucher, R. S., Dixon, A. M., Trabka, E., Drago, J. A. 1994. “Cost‐effectiveness of SDWA Regulations.” Journal – American Water Works Association, 86: 2836.CrossRefGoogle Scholar
Raucher, R. S., Rubin, S. J., Crawford-Brown , D., Lawson, M. M. 2011. “Benefit-Cost Analysis for Drinking Water Standards: Efficiency, Equity, and Affordability Considerations in Small Communities.” Journal of Benefit-Cost Analysis, 2:124.CrossRefGoogle Scholar
Raucher, R, Clements, J, Rothstein, E, Mastracchio, J, Green, Z. 2019. Developing a New Framework for Household Affordability and Financial Capability Assessment in the Water Sector. Washington, DC: The American Water Works Association, National Association of Clean Water Agencies, and Water Environment Federation.Google Scholar
Rubin, S. J., Raucher, R., Harrod, M. 2007. The Relationship Between Household Financial Distress and Health: Implications for Drinking Water Regulation. Washington DC: National Rural Water Association.Google Scholar
Safe Drinking Water Act. 1974. Pub. L. 93-523 (88 Stat. 1660), December 14, 1974.Google Scholar
Safe Drinking Water Act. 1986. Pub. L. 99-339 (100 Stat. 642), June 19, 1986.Google Scholar
Safe Drinking Water Act. 1996. Pub. L. 104-182 (110 Stat. 1613), August 6, 1996.Google Scholar
Schnare, D. W. 1998. “Environmental Rationality and Judicial Review: When Benefits Justify Costs Under the Safe Drinking Water Act Amendments of 1996.” Hastings West-Northwest Journal of Environmental Law and Policy, 5: 65111.Google Scholar
Slabaugh, R. M., Arnold, R. B. Jr., Chaparro, S., Hill, C. P. 2015. “National Cost Implications of Potential Long-Term LCR Requirements.” Journal ‑ American Water Works Association, 107: E389E400.CrossRefGoogle Scholar
Teodoro, MP 2018. Measuring Household Affordability for Water and Sewer Utilities. Journal – American Water Works Association, 110(1): 1324.CrossRefGoogle Scholar
Teodoro, MP 2019. Water and Sewer Affordability in the United States. AWWA Water Science, 1(2): e1129.CrossRefGoogle Scholar
Tiemann, M. 2006. Arsenic in Drinking Water: Regulatory Developments and Issues. Washington, DC: Congressional Research Service.Google Scholar
UNC Environmental Finance Center. 2017. Navigating Legal Pathways to Rate-Funded Customer Assistance Programs: A Guide for Water and Wastewater Utilities. Chapel Hill, NC: UNC EFC.Google Scholar
U.S. Census Bureau. 2016. American FactFinder: 2016. Available at https://factfinder.census.gov/faces/nav/jsf/pages/index.xhtml (accessed October 23, 2018)Google Scholar
U.S. Conference of Mayors, American Water Works Association, Water Environment Federation. 2013a. Assessing the Affordability of Federal Water Mandates. Boulder, CO: Stratus Consulting.Google Scholar
U.S. Conference of Mayors, American Water Works Association, Water Environment Federation. 2013b. Affordability Assessment Tool for Federal Water Mandates. Boulder, CO: Stratus Consulting.Google Scholar
U.S. Conference of Mayors. 2014. Public Water Cost Per Household: Assessing Financial Impacts of EPA Affordability Criteria in California Cities. Washington, DC: USCMe.Google Scholar
U.S. House of Representatives. 2001. “Making Appropriations for the Departments of Veterans Affairs and Housing and Urban Development, and for Sundry Independent Agencies, Boards, Commissions, Corporations, and Offices for the Fiscal Year Ending September 30, 2002, and for Other Purposes.” Conference Report 107-272. Washington, DC: GPO.Google Scholar
USEPA. 1977. Economic Impact Analysis of a Trihalomethane Regulation for Drinking Water. Washinton, DC: EPA/Office of Water Supply.Google Scholar
USEPA. 1991. “Maximum Contaminant Level Coals and National Primary Drinking Water Regulations for Lead and Copper; Final Rule.” Federal Register, 56:26460-26564.Google Scholar
USEPA. 1994. “National Primary Drinking Water Regulations—Sulfate; Proposed Rule.” Federal Register, 59: 6557865604.Google Scholar
USEPA. 1995. “Interim Economic Guidance for Water Quality Standards: Workbook.” EPA 823-B-95-002. Washington DC: USEPA/OW.Google Scholar
USEPA. 1996. Reinventing Environmental Regulation: EPA’s Approach. Washington, DC: USEPA/Office of Reinvention.Google Scholar
USEPA. 1998a. “Information for States on Developing Affordability Criteria for Drinking Water.” EPA 816-R-98-002. Washington, DC: USEPA/OW.Google Scholar
USEPA. 1998b. “National-Level Affordability Criteria Under the 1996 Amendments to the Safe Drinking Water Act (Final Draft Report).” EPA-SAB-DWC-ADV-99-001. Washington DC: USWEPA/OGW&DW.Google Scholar
USEPA. 1998c. “National Primary Drinking Water Regulations: Disinfectants and Disinfection Byproducts; Final Rule.” Federal Register, 63: 6939069476.Google Scholar
USEPA. 1998d. “National Primary Drinking Water Regulations: Interim Enhanced Surface Water Treatment; Final Rule.” Federal Register, 63: 6947869521.Google Scholar
USEPA. 2000a. National Primary Drinking Water Regulations for Lead and Copper; Final Rule. Federal Register, 65: 19502015.Google Scholar
USEPA. 2000b. “Guidelines for Preparing Economic Analyses.” EPA 240-R-00-003. Washington, DC: USEPA.Google Scholar
USEPA. 2001a. “Economic Analysis for the Long Term 1 Enhanced Surface Water Treatment Rule.” EPA 815-R-00-021. Washington, DC: USEPA/OW.Google Scholar
USEPA. 2001b. “National Primary Drinking Water Regulations; Arsenic and Clarifications to Compliance and New Source Contaminants Monitoring; Final Rule.” Federal Register, 66: 69767066.Google Scholar
USEPA. 2001c. “National Primary Drinking Water Regulations; Arsenic and Clarifications to Compliance and New Source Contaminants Monitoring: Delay of Effective Date; Final Rule.” Federal Register, 66: 2834128360.Google Scholar
USEPA. 2002a. “Report to Congress: Small Systems Arsenic Implementation Issues.” EPA 815-R-02-003. Washington, DC: USEPA/OW.Google Scholar
USEPA. 2002b. “National Primary Drinking Water Regulations: Long Term 1 Enhanced Surface Water Treatment Rule; Final Rule.” Federal Register, 67: 18111844.Google Scholar
USEPA. 2005. “Economic Analysis for the Final Stage 2 Disinfectants and Disinfection Byproducts Rule.” EPA 815-R-05-010. Washington, DC: USEPA/OW.Google Scholar
USEPA. 2006a. “National Primary Drinking Water Regulations: Stage 2 Disinfectants and Disinfection Byproducts Rule; Final Rule.” Federal Register, 71: 388493.Google Scholar
USEPA. 2006b. “National Primary Drinking Water Regulations: Long Term 2 Enhanced Surface Water Treatment Rule; Final Rule.” Federal Register, 71: 653786.Google Scholar
USEPA. 2006c. “Small Drinking Water Systems Variances; Revision of Existing National-Level Affordability Methodology and Proposed Methodology to Indentify Variance Technology That is Protective of Public Health.” Docket ID: EPA-HQ-OW-2005-0005. Available at https://www.regulations.gov/docket?D=EPA-HQ-OW-2005-0005. (accessed January 26, 2018)Google Scholar
USEPA. 2006d. “Small Drinking Water Systems Variances—Revision of Existing National-Level Affordability Methodology and Methodology To Identify Variance Technologies That Are Protective of Public Health; Notice.” Federal Register, 71: 1067110685.Google Scholar
USEPA. 2008. Guidelines for Preparing Economic Analyses. Washington, DC: USEPA.Google Scholar
USEPA. 2010. “Guidelines for Preparing Economic Analyses.” EPA 240-R-10-001. Washington, DC: USEPA/National Center for Environmental Economics.Google Scholar
USEPA. 2017. Ground Water and Drinking Water; Basic Information about Your Drinking Water. Available at https://www.epa.gov/ground-water-and-drinking-water/basic-information-about-your-drinking-water (accessed July 1, 2018).Google Scholar
USEPA. 2018a. Lead and Copper Rule Long-Term Revisions. Available at https://www.epa.gov/dwstandardsregulations/lead-and-copper-rule-long-term-revisions. (accessed February 16, 2019)Google Scholar
USEPA. 2018b. National Primary Drinking Water Regulations. Available at https://www.epa.gov/ground-water-and-drinking-water/national-primary-drinking-water-regulations. (accessed October 23, 2018)Google Scholar
USEPA Environmental Financial Advisory Board. 2016. Household Affordability Challenges in the Water Sector. Washington, DC: USEPA/EFAB.Google Scholar
USEPA National Drinking Water Advisory Council. 2003. Recommendations of the National Drinking Water Advisory Council to U.S. EPA on Its National Small Systems Affordability Criteria. Washington, DC: USEPA.Google Scholar
USEPA National Environmental Justice Advisory Council. 2009. Letter to Lisa P. Jackson, Administrator. Washington, DC: USEPA/NEJAC.Google Scholar
USEPA Office of the Science Advisor. 2004. “An Examination of EPA Risk Assessment Principles and Practices; Staff Paper.” EPA/100/B-04/001. Washington, DC: USEPA/Risk Assessment Task Force.Google Scholar
USEPA Science Advisory Board. 2002. “Affordability Criteria for Small Drinking Water Systems: An EPA Science Advisory Board Report.” EPA-SAB-EEAC-03-004. Washington, DC: EPA SAB.Google Scholar
USEPA Science Advisory Board. 2011. “SAB Evaluation of the Effectiveness of Partial Lead Service Line Replacements.” EPA-SAB-11-015. Washington, DC: USEPA/SAB.Google Scholar
Wagner, WE. 2009. “The CAIR RIA: Advocacy Dressed Up as Policy Analysis.” In Reforming Regulatory Impact Analysis, edited by Harrington, W., Heinzerling, L., Morgenstern, R. D., 6581. Washington, DC: Resources for the Future.Google Scholar
Wikipedia. 2018. Doctrine. Available at https://en.wikipedia.org/wiki/Doctrine. (accessed October 15, 2018)Google Scholar
Supplementary material: File

Belzer supplementary material

Belzer supplementary material

Download Belzer supplementary material(File)
File 101 KB

Send article to Kindle

To send this article to your Kindle, first ensure no-reply@cambridge.org is added to your Approved Personal Document E-mail List under your Personal Document Settings on the Manage Your Content and Devices page of your Amazon account. Then enter the ‘name’ part of your Kindle email address below. Find out more about sending to your Kindle. Find out more about sending to your Kindle.

Note you can select to send to either the @free.kindle.com or @kindle.com variations. ‘@free.kindle.com’ emails are free but can only be sent to your device when it is connected to wi-fi. ‘@kindle.com’ emails can be delivered even when you are not connected to wi-fi, but note that service fees apply.

Find out more about the Kindle Personal Document Service.

Achieving Economically Feasible Drinking Water Regulation
Available formats
×

Send article to Dropbox

To send this article to your Dropbox account, please select one or more formats and confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your <service> account. Find out more about sending content to Dropbox.

Achieving Economically Feasible Drinking Water Regulation
Available formats
×

Send article to Google Drive

To send this article to your Google Drive account, please select one or more formats and confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your <service> account. Find out more about sending content to Google Drive.

Achieving Economically Feasible Drinking Water Regulation
Available formats
×
×

Reply to: Submit a response

Please enter your response.

Your details

Please enter a valid email address.

Conflicting interests

Do you have any conflicting interests? *