United States
Environmental Protection
Agency
Office of Water
Washington, D.C.
EPA 800-R-94-002
March 1994
PRESIDENT CLINTON'S
CLEAN WATER INITIATIVE:
Analysis of Benefits and Costs
Recycled/Recyclable
Printed with Soy/Canola Ink on paper that
contains at least 50% recycled fiber
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ACKNOWLEDGEMENTS
This document was prepared with the assistance of the following federal agencies:
Office of Environmental Policy
Council of Economic Advisers
Office of Management and Budget
National Economic Council
Environmental Protection Agency
Department ^of Agriculture
Department of Commerce
Department of Defense
Department of Energy
Department of Interior
Technical assistance was provided by:
Eastern Research Group, Inc.
Cadmus, Inc.
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Table of Contents
EXECUTIVE SUMMARY
ES-1
1 Introduction
2 Approach
3 Nonpoint Source Controls
3.1 Private Sources
3.2 Municipalities
3.3 State Water Programs
3.4 Federal Agencies
3.5 Benefits
4 Storm Water
4.1 Private Sources
4.2 Municipalities
4.3 State Water Programs
4.4 Federal Agencies
4.5 Benefits
5 Combine Sewer Overflows
5.1 Private Sources
5.2 Municipalities
5.3 State Water Programs
5.4 Federal Agencies
5.5 Benefits
6 Toxics Controls
6.1 Private Sources
6.2 Municipalities
6.3 State Water Programs
6.4 Federal Agencies
6.5 Benefits
7 Comprehensive Watershed Management
7.1 Private Sources
7.2 Municipalities
7.3 State Water Programs
7.4 Federal Agencies
7.5 Benefits
I Permit Discharge Fee
8.1 Private Sources
8.2 Municipalities
8.3 State Water Programs
8.4 Federal Agencies
.1
.2
.5
14
22
27
30
34
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Groundwater Protection
36
9.1 Private Sources
9.2 Municipalities
9.3 State Water Programs
9.4 Federal Agencies
9.5 Benefits
10 Pollution Prevention Plans
10.1 Private Sources
10.2 Municipalities
10.3 State Water Programs
10.4 Federal Agencies
11 Domestic Sewage Exclusion/Pretreatment . . .
11.1 Private Sources
11.2 Municipalities
11.3 State Water Programs
11.4 Federal Agencies
12 Permits/Enforcement/Water Quality Standards
12.1 Private Sources
12.2 Municipalities
12.3 State Water Programs
12.4 Federal Agencies
13 State Revolving Fund/Construction Grants . .
13.1 Private Sources
13.2 Municipalities
13.3 State Water Programs
13.4 Federal Agencies
14 Monitoring
14.1 Private Sources
14.2 Municipalities
14.3 State Water Programs
14.4 Federal Agencies
15 Abandoned Mines
15.1 Private Sources
15.2 Municipalities
15.3 State Water Programs
15.4 Federal Agencies
15.5 Benefits
16 Market Incentives - Effluent Trading
16.1 Point Source - Nonpoint Source
16.2 Point Source - Point Source
16.3 Nonpoint Source - Nonpoint Source
16.4 Pretreatment
38
39
40
41
42
43
46
11
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17 Aggregate Benefit Estimates
17.1 Introduction
17.2 Limitations
17.3 Methodology and Assumptions
17.4 Summary of Benefits Results
48
Appendices
Appendix A: Nonpoint Source Case Studies
Appendix B: Storm and Surface Water Utility, Bellvue, Washington
Appendix C: Benefits of Toxic Reduction Case Studies
Appendix D: Detailed Aggregate Benefit Anatysis
111
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List of Tables
Table
Number Title
ES-1 Summary of Current and Planned Spending Under the Existing CWA
ES-2 Summary of Incremental Costs of the Initiative
ES-3 Summary of Cost Savings/Costs Avoided of the Initiative Compared With
Stringent Interpretation of Existing CWA Requirements
ES-4 Summary of Current and Potential Spending Under Stringent Interpretation of
CWA
ES-5 Summary of Aggregate Annualized Costs From Control of Urban Sources Under
the Initiative and Pending Spending (CSOs, Storm Water, Toxics)
ES-6 Summary of Aggregate Annualized Benefits From Control of Urban Sources
Under the Initiative and Pending Spending (CSOs, Storm Water, Toxics)
1 Classification of Nonpoint Source Sectors
2 Impacts of the Initiative's Nonpoint Source Control Requirements on Private
Sources
3 Descriptive Statistics of the Coastal and Noncoastal Zone
4 Impact of the Initiative on Federal Agencies
5 Use Support Status of Assessed River Miles and Miles Impacted in Part by
Selected Sources
6 Use Support Status of Assessed River Miles and Miles Impacted Solely by
Selected Sources
7 Use Support Status of Assessed Lake Acres and Acres Impacted in Part by
Selected Sources
8 Use Support Status of Assessed Lake Acres and Acres Impacted Solely by
Selected Sources
9 Likelihood That Full Implementation of Management Measures will Improve
Water Quality in Threatened and Impaired Rivers
10 Likelihood That Full Implementation of Management Practices will Improve
Water Quality in Threatened and Impaired Lakes
11 Summary of Likelihood That Full Implementation of NFS Management Measures
Will Measurably Improve Water Quality - Rivers
12 Summary of Likelihood That Full Implementation of NFS Management Measures
Will Measurably Improve National Water Quality - Rivers
13 Summary of Likelihood That Full Implementation of NFS Management Measures
Will Measurably Improve Water Quality - Lakes
14 Summary of Likelihood That Full Implementation of NFS Management Measures
Will Measurably Improve National Water Quality - Lakes
15 Summary of CSO Costs and Benefits of Various Control Options
16 Impacts of the Initiative's Domestic Sewage Exclusion Provision on Private
Sources
-iv-
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17 Summary of Aggregate Annualized Costs From Control of Urban Sources Under
the Initiative and Pending Spending (CSOs, Storm Water, Toxics)
18 Summary of Aggregate Annualized Benefits From Control of Urban Sources
Under the Initiative and Pending Spending (CSOs, Storm Water, Toxics)
19 Summary of Current and Planned Spending Under the Existing CWA
20 Summary of Incremental Costs of the Initiative
21 Summary of Cost Savings/Costs Avoided of the Initiative Compared With
Stringent Interpretation of Existing CWA Requirements
22 Summary of Current and Potential Spending Under Stringent Interpretations of
CWA
-v-
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List of Figures
Figure
Number
ES-1
ES-2
ES-3
ES-4
ES-5
ES-6
1
2
Title
Annual
Annual
Annual
Annual
Annual
Annual
Cost of Major Provisions
Cost of Major Provisions: Private Sources
Cost of Major Provisions: Municipalities
Cost of Major Provisions: Agriculture
Cost of Major Provisions: States
Cost of Major Provisions: Federal Agencies
Nonpoint Source Management Measures Applied in Benefits Analysis
Costs and Benefits of CSO Controls
-vi-
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List of Appendices
Appendix A Nonpoint Source Case Studies
Appendix B Bellvue Washington Storm Water Case Study
Appendix C Benefits of Toxic Reduction Case Studies
Appendix D Detailed Aggregate Benefits Analysis
-vii-
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Executive Summary
Introduction
This report summarizes the costs and benefits of provisions contained in President
Clinton's Clean Water Initiative. As noted in Executive Orders 12866 and 12893, such
comparisons are necessary because resources committed to implement the Initiative can be used
for alternative productive purposes. Therefore, the opportunity costs of these resources should
be compared with the economic benefits. Such comparisons should be used to help fashion
policies that offer the largest possible net benefits.
In addition to estimated costs and benefits, many factors need to be taken into account
in supporting an environmental initiative. These include large uncertainties and gaps in
estimating benefits and costs, the distribution of benefits and costs among segments of the
American people, and support of the public for environmental controls. Regarding these
matters, the Administration believes that it is appropriate to be on the side of environmental
caution because of the large uncertainty about the effectiveness of proposed controls, and about
the benefits and costs generally. The Administration also recognizes the continuing support for
the Clean Water Act (CWA) both in Congress and by the general public. Finally, the
Administration believes that cleaner water is especially important because it provides benefits
that are distributed broadly among all Americans, irrespective of income levels or ethnic
background.
The Initiative will require incremental expenditures of $5 to $9.6 billion per year.
However, compared with the costs of a stringent interpretation of the current law, the Initiative
will yield potential savings (or avoid future costs) of $29 to $33.8 billion.
Approach
Scope. This report presents the costs of the Initiative, measures of physical benefits of
the Initiative, and estimates of the costs and monetized benefits of provisions of the Initiative
applicable to urban areas only.
Costs are reported in two different ways. First, they are provided by sector: (1) private
sources (i.e., industry, commercial and private individuals), (2) agriculture (farmers), (3)
municipalities (including operators of public wastewater treatment facilities), (4) state
governments, through their water programs, and (5) federal agencies. It is recognized that some
of the effects of the Initiative are transfers rather than costs. Second, costs are provided for
each major provision of the Initiative. For comparison with monetized benefits in urban areas,
incremental costs are also reported for three general provisions: storm water Phase I and II,
combined sewer overflow controls, and toxics.
Benefits of the Initiative are reported in physical terms, such as stream miles of
improvements. For urban areas only, benefits are reported in monetized terms; we account for
ES-1
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a large variety of benefit categories, the most important being recreational fishing and
swimming.
Estimates of the Initiative's impact were developed by the U.S. Environmental Protection
Agency (EPA) Office of Water in consultation with EPA's Office of Policy, Planning, and
Evaluation and other federal agencies, including the U.S. Department of Agriculture (USDA),
U.S. Department of the Interior (DOT), U.S. Department of Commerce (DOC) - National
Oceanographic and Atmospheric Administration (NO A A), U.S. Department of Defense (DOD),
and U.S. Department of Energy (DOE), as well as with the White House Office of Management
and Budget (OMB), Council of Economic Advisers (CEA), and National Economic Council
(NEC).
Baseline. Some provisions of the 1987 Clean Water Act Amendments have not yet been
implemented. Some provisions of the Initiative will impose new responsibilities and costs
beyond those called for in the 1987 Amendments. Others scale back obligations under the
Amendments and will save the private sector, municipalities, and the federal government
billions of dollars while not compromising environmental quality. Therefore, it is legitimate to
view the baseline from which costs of the Initiative are estimated in two ways: as increments
above current and pending spending or as reductions in costs from stringent interpretations of
the 1987 CWA. The stringent interpretations reflect the reading of the law proposed by various
outside groups but do not represent EPA's best interpretation of the law. However, while EPA
believes that these interpretations are stringent and inflexible, they could potentially be adopted
by a court in litigation challenging EPA's interpretation. This report carefully distinguishes
estimates from these two baselines.
Consistency in Benefit and Cost Estimation. To assure that urban area benefits and
costs are comparable, a number of steps were taken. The costs and benefits are presented in
annualized 1993 dollars. Benefits are discounted using three different discount rates (zero,
three, and seven percent), and assuming that they are fully in place in 15 years. This procedure
is necessary to account for the fact that benefits or costs experienced later in time are worth less
than those experienced sooner. The nature of environmental risks is that it will take time to
fully attain many of the projected water quality improvements and economic benefits. Costs are
annualized at seven percent.
Uncertainties in Estimating Costs. To account for the uncertainty inherent in estimating
costs for various provisions, we have used ranges of likely values where possible. The cost
estimates are based on the best available evidence and best professional judgment about the
controls likely to be imposed. In some instances, however, these controls may be insufficient
to meet either current or future water quality standards, and additional more stringent controls
could be adopted. The cost estimates do not include any such additional controls because of the
difficulty of estimating their magnitude. To the extent that additional controls are needed to
meet water quality standards, there would be additional costs.
ES-2
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Sector-Specific Costs
Table ES-1 presents information on current and planned expenditures associated with the
current implementation of the existing CWA requirements. Table ES-2 summarizes the
incremental costs of the Initiative. Table ES-3 presents information on the potential cost savings
(or costs avoided) compared with a stringent interpretation of CWA requirements Table ES-4
summarizes the current and potential spending under a stringent interpretation of CWA
requirements. The annual cost of major provisions is presented in Figure ES-1 l The hiehliehts
from the tables are as follows:
» Private sources will likely incur incremental costs of $1.6 billion to $3.5 billion
per year, but these costs are substantially less than under existing statutory
requirements for storm water controls. The major new cost items, as shown in
Table ES-2, are the storm water controls ($345 to $1,670 million per year)
nonpomt source controls/watersheds ($233 to $388 million), groundwater
protection ($150 to $600 million per year) and the permit fee program ($290
million per year). These additional costs are much smaller than the projected
$15.7 billion to $17.5 billion in avoided storm water control costs for both Phase
I and Phase H (see Table ES-3). These savings represent the projected cost
difference between the Initiative and a stringent interpretation of the existing
CWA requirements. One area with potentially significant cost implications that
is not included in the current estimates is the cost of complying with future water
quality standards and toxic pollutant control. These costs are not estimated
because of the difficulty in predicting whether and how these provisions will be
implemented. Figure ES-2 presents this information graphically.
+ Agriculture will likely incur incremental costs of $595 to $985 million per year
net of savings from reduced use of fertilizers and pesticides. Farmers will incur
these costs to control agricultural runoff by using best management practices on
farms that are located on impaired or threatened water bodies. Net increases in
costs are shown graphically in Figure ES-4.
> Municipalities will likely incur incremental costs of $1.2 billion to $2.1 billion
per year, as shown in Table ES-2, but they will realize savings from changes in
the storm water provisions. As shown in Table ES-3, the storm water control
provisions (Phase I and Phase II) will produce savings of between $0.76 billion
and $0.85 billion per year from a stringent interpretation of current CWA
requirements. The CSO provisions will codify the final CSO Policy (estimated
to cost $3.45 billion annually) and will save municipalities an estimated $10.7
billion per year compared with the projected compliance costs under a stringent
interpretation of the current CWA requirements. Total municipal cost savings or
1 Mid-points of ranges are used in preparing figures. The numbers in figures and tables may not match due
to rounding.
ES-3
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costs avoided are estimated at $11.5 billion to $11.6 billion per year. Figure ES-
3 presents this information graphically.
» States will likely incur incremental costs of $416 million to implement numerous
new provisions. The two major cost elements are: $118 million for monitoring
and $188 million for NPDES enforcement and permitting. The states will receive
about $301 million annually in fees collected from National Pollutant Discharge
Elimination System (NPDES) permittees. Thus, the net increase in costs for
states is about $115 million per year, most of which is associated with implement-
ing the NPS provisions. See also Figure ES-5 for a graphical presentation.
»- Federal agencies will incur additional costs of approximately $118 to $210
million to implement and comply with the nonpoint source (NPS) and watershed
provisions.2 The Department of Energy estimated an overall incremental annual
cost of $520 million for the Initiative's provisions. Costs for remediating
abandoned mines are estimated to be between $330 million and $1,100 million
per year. These estimates are presented in Table ES-2. Major savings over
current CWA requirements will occur as a result of a more targeted approach to
remediation of abandoned mine sites that affect surface water quality. Net
impacts on federal agencies are a cost savings of between $1.1 billion and $3.5
billion annually compared with a stringent interpretation of existing law, as shown
in Table ES-3. Figure ES-6 presents this information graphically.
Provision-Specific Costs
The impacts of major provisions of the Initiative are summarized below (see also Figure
ES-1):
Nonpoint Source Control/Watershed Approach - The implementation of the NPS
management programs for both agricultural and non-agricultural (urban) areas will cost pnvate
entities and municipalities an estimated $828 million to $1.37 billion per year, net of cost
savings from reduced fertilizer and pesticides usage. States will oversee the development of
NPS programs at a cost of $92 million per year. Federal agency costs, meanwhile, are
estimated to be between $118 million and $210 million per year. Figure ES-4 presents
information separately for agriculture.
Storm Water - EPA estimates that the control of storm water discharges, under a
stringent interpretation of the 1987 CWA, would impose large costs on private sources
2 USDA's Soil Conservation Service has indicated that if implementation is their responsibility, the cost would
range between $211 and $540 million per year to assist the farmers with implementing NPS control measures. Also
excluded are permitting costs that the Forest Service has estimated to apply to federal lands ($716 to $718 million)
under a provision of S. 1114 that required reissuance of all Forest Service permits on an accelerated basis. Under
the Initiative, permits would be reissued on existing schedules and therefore not result in a significant cost increase.
ES-4
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(approximately $20.2 billion) and municipalities (between $3.4 and $5.3 billion), as shown in
Table ES-4. The Initiative presents a more targeted storm water plan that, compared with the
stringent plan, would save private sources between $15.7 billion and $17.5 billion per year and
would save municipalities an estimated $0.76 billion to $0.85 billion per year for both Phase I
and Phase II. The total projected impacts of the storm water provisions, therefore, are savings
in the range of $16.5 billion to $18.4 billion per year.
CSOs - The current CSO Policy, negotiated with the municipalities, environmental
groups and states, is estimated to cost about $3.45 billion per year. Full implementation of the
CSO requirements, under a stringent interpretation of the CWA, could cost as much as $14.14
billion. The Initiative is proposing to codify the more cost-effective, site-specific CSO control
strategy that could potentially save municipalities about $10.7 billion per year in avoided costs.
Toxics Control - Under the Initiative's toxics provision, EPA would have additional
opportunity to limit releases of the most toxic and bioaccumulative pollutants in certain
circumstances. The Initiative would also refocus the development of water quality criteria and
standards. The Administration's approach would encourage examining multi-media strategies
to restrict or ban the discharge of toxic pollutants, which would allow the Agency the flexibility
to select the most cost-effective controls. The toxics provision is estimated to cost Federal
agencies, including EPA, between $66 million and $105 million per year.
Discharge Fees - The Initiative would require states (and EPA, in states administered by
EPA) to have in place a permit fee system that would produce sufficient revenues to fully fund
the NPDES, pretreatment, and sludge programs. EPA estimates that unfunded costs associated
with these programs total $394 million per year and would have to be collected from industrial
and municipal dischargers. States would receive approximately $301 million in revenues, with
the remainder going to EPA for the permits it issues.
Groundwater Protection - The Initiative acknowledges the connection between surface
water contamination and groundwater quality and establishes the protection of groundwater as
a specific goal of surface water programs. EPA believes that implementation of these provisions
will help protect groundwater and drinking water supplies from contamination originating from
surface water discharges. Costs to private sources responsible for this cleanup will average
between $150 million and $600 million per year.
Pollution Prevention Planning - The Initiative would give EPA and authorized States
the discretionary authority to require pollution prevention plans as a condition of NPDES permits
for industrial users. EPA estimates that at most 6,000 permittees each year would be required
to prepare such plans, at an annual cost of between $60 million and $120 million. The cost of
implementing such plans has not been estimated. States would be responsible for writing this
provision into NPDES permits and for reviewing plans prepared by the permittees. Estimates
of these costs, however, are not available because not all facilities will be required to implement
such plans.
ES-5
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Domestic Sewage Exclusion - The Initiative would retain the domestic sewage exclusion
(DSE) for facilities subject to local limits set by publicly owned treatment works (POTWs),
national standards, or the 304(m) plan. Facilities subject to toxic reduction action plans
(TRAPs) by their POTWs would also be exempt, as would households and noncommercial and
nonindustrial facilities that discharge de minimis amounts of waste. EPA estimates that the
impacts of these additional measures on dischargers will average $282 million per year.
Enforcement - The enforcement provisions in the Initiative include a variety of measures
that provide additional incentives to assure compliance, to ensure that penalties more closely
match the economic benefits of noncompliance, and to facilitate the processing of violation
cases. The Initiative also recommends a waiver of sovereign immunity for federal facilities in
violation of Clean Water Act provisions. Fines and penalties for violations are not economic
costs but instead are considered a transfer to the federal government. The new enforcement
provisions are estimated to cost States an additional $90 million per year.
State Revolving Fund/Construction Grants - The revised state revolving fund (SRF)
and construction grants program will impose limited additional costs. State costs are estimated
at $8 million per year.
Monitoring - The monitoring provisions will largely impact State governments, with an
estimated cost of $118 million per year. Federal agency impacts are negligible, with the
exception of the Forest Service, which will incur costs of approximately $37 million per year
to perform the monitoring function on federal lands managed by that agency.
Abandoned Mines - Under a stringent interpretation of the current CWA provisions, an
estimated 500,000 sites would require remediation at a cost of between $1.38 billion and $4.58
billion per year. Because a vast majority of these mines do not contribute to water quality
problems, the Initiative introduces a targeted approach so as to achieve the greatest environmen-
tal improvement for the limited federal resources that may be available. The costs of this
approach are estimated at between $330 million and $1,100 million per year. The net impact
of the Initiative is, therefore, a savings of between $1.1 billion and $3.5 billion per year.
To summarize, the annual incremental cost of the Initiative on all sectors ranges from
$5.0 billion to $9.6 billion. The annual cost savings (or costs avoided) by all sectors range
between $29.1 and $33.8 billion.
Potential Cost Savings From Economic Incentives - Effluent Trading
The Initiative contains provisions mat would encourage the establishment of mechanisms
for trading pollution reduction among sources, similar to the trading provisions of the 1990
Glean Air Act Amendments. A preliminary analysis by EPA indicates that trading could achieve
pollution reduction at significantly lower costs. These potential decreases in costs should be
viewed as future costs avoided (or not incurred) because dischargers will not be installing
additional controls to meet new requirements. These potential cost savings should not be.viewed
ES-6
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as decreasing other costs discussed in this report but instead would represent reductions in the
cost of additional controls needed for growth or to meet water quality standards. The decreased
costs of pollution prevention and control, by type of trading, were estimated as follows:
Point source/nonpoint source $611 million to $5.6 billion
Point source/point source $8.4 million to $1.9 billion
Nonpoint source/nonpoint source Potential exists but limited data
Pretreatment $39 million
TOTAL $658 million to $7.5 billion
Physical Measures of National Benefits
This report contains summaries of the physical benefits of individual provisions contained
in the Initiative (e.g., toxics control, NPS prevention, abandoned mines, etc.). The benefits
descriptions for the individual provisions are intended to indicate the scope of the problems
addressed by the Initiative (in terms of water quality and human and ecological impacts) and the
magnitude of the benefits obtained from addressing these problems. Results from these benefits
analyses indicate that the Initiative's provisions could cause substantial improvements in water
quality.
* NPS controls have a high or medium likelihood of producing measurable water
quality improvements in 52 percent of impaired or threatened rivers and 63
percent of impaired or threatened lakes acres based on data from 28 states. For
all 54 states and territories, EPA projects that about 156,200 river miles and 7.1
million lake acres will show measurable water quality improvements.
* Storm water control can reduce loadings of urban pollutants (sediment, toxics,
nutrients) by 75 to 80 percent in developing areas and by 15 to 25 percent in
areas already developed.
* Implementation of EPA's CSO Policy will provide adequate treatment for over
one billion gallons of raw sewage, urban runoff, and industrial wastewater that
are currently discharged without treatment during ;m average year (reducing
pollutant loadings of 2,050 million pounds of total suspended solids (TSS) and
445 million pounds of biological oxygen demand (BOD) annually).
> Further control over the discharge of toxic and/or bioaccumulative pollutants will
reduce impacts on human health and aquatic life impacts.
Monetized Benefits: Urban Areas
EPA estimates further that the aggregate benefits of pollution, control in urban areas will
eventually produce quantifiable benefits of between $0.8 billion and $6.0 billion per year (Table
ES-6). The range recognizes the uncertainty associated with these estimates. For example, the
upper end of the range may be an underestimate in the extreme case where the new provisions
ES-7
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are 100 percent effective, households care very much about the resultant improvements relative
to the other waters in their state, and the unquantified benefits turn out to be significant relative
to the quantified benefits. Similarly, the lower end of the range may be an overestimate in the
extreme event that the new provisions fail to improve water quality to fishable and swimmable
levels, or the changes in water quality have no effect on the economic activities of consumers
and producers.
The benefit estimates are based on household valuation of clean water for a variety of
purposes. However, several important additional categories of benefits which are either not
quantified because relevant data are not available or are not amenable to estimation via
quantitative techniques will also accrue. Examples include:
>
»•
>
>
Enhanced recreational swimming and boating in marine waters.
Improved recreational hunting opportunities as watershed habitats improve.
Avoided costs for water storage, flood control and water purification as natural
systems improve.
Reduced dredging costs as watershed and wet weather programs reduce siltation.
Lower costs for sediment remediation over time as toxics and permitting
provisions are adopted.
> Increases in biodiversity and overall ecological integrity.
Limitations. The analysis of the economic benefits focusing on urban areas draws upon
information provided by a number of disparate data sources, and relies upon a number of
assumptions. The synthesis of information introduces considerable uncertainty into the final
numeric values. Major sources of uncertainty that limit our ability to be confident in the
numeric results include: (1) the actual extent of impaired waters; (2) the method of attributing
responsibility for impairment; (3) our assumptions about the efficacy of the provisions; and (4)
the reliance upon secondary sources of information when estimating the economic values of
environmental quality. The absence of reliable information on all of these elements plays a
critical role in our ability to draw conclusions about the benefits that will result from the
Initiative.
One of the more significant points of uncertainty in the analysis relates to the monetary
valuation of economic benefits for the dominant benefit category— the enhanced freshwater
recreation, aesthetics, and non-use benefits that ensue with the proposed water quality
improvements. The absence of alternative data sources constrained us to make use of a
published, yet dated, contingent valuation research study that measured a household's use and
non-use values for national and, by apportionment techniques, more localized improvements in
freshwater rivers and lakes. Criticism has been levied against the validity of empirical results
for non-use values derived using prior contingent valuation research methods. Several issues
raised in the ongoing debate about this valuation method bear directly upon the interpretation of
the numeric results provided by our source materials.
ES-8
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Independent of this debate, further uncertainties are introduced by transferring the
research results to the policies and environmental concerns addressed by the Initiative. The wide
range of values demonstrates an attempt to capture the impact of these uncertainties on the
numeric estimate. All told, it is difficult to conclude whether the presented numeric ranges
underestimate or overestimate the actual benefits.. We suggest that the numerical results best
serve to indicate the overall order-of-magnitude of the benefits. Based upon our experience in
undertaking the analysis, we can further conclude that considerable gaps persist in our ability
to measure and evaluate the relationships between water quality conditions and economic
activities, even twenty years after the passage of the principal legislation designed to identify and
address water pollution problems. The Administration's Initiative contains provisions to help
rectify this situation in the future.
Costs: Urban Areas
Provisions in the Initiative that address urban areas are loosely defined to include storm
water Phase I and Phase II, CSOs and toxics controls. The annualized costs of these provisions
for all sectors is estimated to be between $9.9 billion and $13.9 billion, as shown in Table ES-5.
Net Benefits: Urban Areas
The monetized benefits of the Initiative ($0.8 billion to $6.0 billion), assuming benefits
are realized immediately, contrast with between $9.9 billion to $13.9 billion in incremental
annualized costs for urban areas.
However, benefits are unlikely to be realized immediately. To illustrate how the gradual
attainment of the benefits may influence the benefit-cost comparison, the figures in Tables ES-5
and ES-6 show the annualized monetary costs and benefits from control of urban sources under
proposed and pending spending. In Table ES-6, two of the three aggregate benefit estimates
provide for the gradual attainment of benefits, applying different discount rates to an assumed
future stream of benefits. The selection of the two discount rates reflects Administration
guidelines on the application of discounting to costs and benefits (seven percent), as compared
with the use of a social rate of time preference (three percent). The discounted annualized
benefits are some twenty to thirty percent lower than the annualized benefit estimate that fails
to account for the expected delays in achieving tangible water quality improvements. This
serves to demonstrate the sensitivity of the results to both the time and discounting features of
the analysis.
Comparing the annualized costs and benefits under any of the three annualized benefit
estimation scenarios, it is apparent that the range of estimated monetary costs and benefits do
not presently overlap. Despite information of this type, the Administration feels it is important
to proceed with the Initiative for several reasons. As stated throughout the text, and documented
in the supplemental materials, there are great uncertainties associated with both the cost and
benefit estimates that are not captured in the presentation of the numerical results. For example,
although the national cost estimates have attempted to account for targeting of watersheds in
ES-9
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need of improvement and emphasized prevention measures over command-and-control strategies,
there are uncertainties in the analysis because of the difficulty of fully accounting for the
consequences of providing flexibility in the identification of problems and solutions. There are
also a number of tangible benefits for which monetary estimates have not been developed. So
as to better inform decisionmakers and the public in the future EPA is proposing a comprehen-
sive benefit-cost study of the pollution controls in the CWA reauthorization. This study will
reduce the uncertainties surrounding the benefits and cost estimates.
Despite the uncertainties, an important contribution of the economic analysis has been
its ability to document the significant savings the Initiative is proposing compared with the
requirements called for in the existing legislation. In addition, considerable effort was given to
developing cost-effective policies where new efforts are needed to achieve the goals of the Clean
Water Act. Therefore, the Initiative demonstrates a genuine effort to achieve cost-effective
regulatory management approaches to improving the nation's polluted waters. Equally
important, the public's right to enjoy clean waters, and the demonstration of their preferences
through environmentally protective federal legislation, have served as inputs into the
development of Administration policy. Strong public support for additional pollution control
programs persists, and the Initiative will address what the Administration believes are the most
significant remaining problems.
ES-10
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Table ES-5
Summary of Aggregate Anmialized Costs from Control of Urban Sources Under the
Initiative and Pending Spending (CSOs, Storm water, Toxics)
Cost Category
Municipal Costs
Phase I Storm water
Phase n Storm water
CSO Controls
CZARA Non-Point Controls
Pending Spending (Great Lakes,
Sludge)
Subtotal Municipal
Private Sector
Phase I Storm water
Phase II Storm water
Pollution Prevention Plans
Domestic Sewage Exclusion
Nonpoint Source Controls
Subtotal Private Sector
Total Quantified Costs in Urban Areas
Range: Low - High
(Millions of 1993 $)
$ 1,650 - $ 2,555
$ 1,030 - $ 1,910
$ 3,450
$390- $590
$90
$ 6,610 - $ 8,595
$2,360- $2,850
$ 345 •- $ 1,670
$ 60 - $ 120
$ 280
$ 233 - $ 388
$3,278- $5,308
$ 9,888 •- $ 13,903
Non-Quantified Costs
State Administration Costs (Urban portion of $650m)
Federal Compliance (Urban portion of $945m) - excludes abandoned mines.
Groundwater Controls (Urban portion of $150m to $600m)
Further Water Quality Criteria and Standards and sediment criteria
Toxics Bans
Other Pending Spending (e.g., Great Lakes, Pulp and Paper Effluent Guidelines, Air MACT
standards)
Source: Tables ES-1 and ES-2.
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Table ES-6
Summary of Aggregate Annualized Benefits from Control of Urban Sources Under the
Initiative and Pending Spending (CSOs, Storm water, Toxics)
Benefit Category
Quantified Benefits
Range: Low - High
(Millions of 1993 $)
| Freshwater Recreational Fishing and Swimming (use and nonuse)
Marine Recreational Fishing (use only)
(I Marine Nonconsumptive Recreation (use only)
Marine and Freshwater Commercial Fishing
Withdrawal or Diversionary Uses
Human Health Effects (from risks associated with exposure to pollutants via
swimming activity and seafood consumption)1
Sub-total: Quantified Benefits2
I Assuming immediate attainment of benefits3
1 (i) Annualized Benefits (no lag and no discounting, thus a
1 simple summation of individual categories)
Assuming a gradual attainment of benefits over the first 15 year period that
all Urban Source Controls are adopted.4
(ii) Annualized Benefits (seven percent discount rate, gradual
attainment over first 15 years)
(iii) Annualized benefits (three percent discount rate, gradual
attainment over first 15 years)
$650-
$40-
, $30-
$40-
$20-
$40-
(i) $ 820
(ii) $ 560
(iii) $ 660
$ 4,670
$440
$300
$ 190
$ 80
$320
-$6,000
- $ 4,100
- $ 4,900
Non-Quantified Benefits
- Marine Recreational Swimming (nonhealth effects)
- Other Human Health Effects hi Marine and Freshwaters (see Note 1)
- Recreational Hunting- Freshwater Nonconsumptive Recreation (see Note 1)
- Marine Recreational Boating
- Other Non-use Benefits (Marine Waters - see Note 1)
- Other avoided costs (e.g., water storage, dredging, damages from floods)
- Restoration of biodiversity and ecosystem integrity
uiven miormauon ana metnoas used to calculate the quantified benefits, some portion of the benefits associated
with these categories may be captured in the monetary range ascribed to freshwater recreation fishing and
swimming.
* Assumes no double counting of benefits or substitution effects between different categories when developing
aggregate national estimates. Also assumes that all lower and upper ends of the range for each quantified category
describe the aggregate lower and upper bound estimate. Absent information on the distribution or probability of
attaining benefits defined by the estimated range, we can not calculate a "most likely" estimate.
3 Assuming no lag between implementation of controls, recovery of natural ecological systems, and economic
behavior that forms the basis for the economic benefit measures.
4 These estimates of the economic benefits are more appropriate to use when comparing quantified costs and
benefits, given the anticipated lag time between introduction of the control measures and full realization of the
environmental and economic benefits. The calculated annualized figure is based on assuming a gradual attainment
of benefits up through year fifteen, and a constant future benefits stream after the fifteenth year has been reached.
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1.0 Introduction
This report summarizes the costs and benefits of provisions contained in President
Clinton's Clean Water Initiative. As noted in Executive Orders 12866 and 12893, such
comparisons are necessary because resources committed to implement the Initiative can be used
for alternative productive purposes. Therefore, the opportunity costs of these resources should
be compared with the economic benefits. Such comparisons should be used to help fashion
policies that offer the largest possible net benefits.
In addition to estimated costs and benefits, many factors need to be taken into account
in supporting an environmental initiative. These include large uncertainties and gaps in
estimating benefits and costs, the distribution of benefits and costs among segments of the
American people, and support of the public for environmental controls. Regarding these
matters, the Administration believes that it is appropriate to be on the side of environmental
caution because of the large uncertainty about the effectiveness of proposed controls, and about
the benefits and costs generally. The Administration also recognizes the continuing support for
the Clean Water Act (CWA) both in Congress and by the general public. Finally, the
Administration believes that cleaner water is especially important because it provides benefits
that are distributed broadly among all Americans, irrespective of income levels or ethnic
background.
The Initiative will require incremental expenditures of $5 to $9.6 billion per year.
However, compared with the costs of a stringent interpretation of the current law, the Initiative
will yield potential savings (or avoid future costs) of $29 to $33.8 billion.
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2. Approach
Scope. This report presents the costs of the Initiative, measures of physical benefits of
the Initiative, and estimates of the costs and monetized benefits of provisions of the Initiative
applicable to urban areas only.
Costs are reported in two different ways. First, they are provided by sector: (1) private
sources (i.e., industry, commercial and private individuals), (2) agriculture (farmers), (3)
municipalities (including operators of public wastewater treatment facilities), (4) state
governments, through their water programs, and (5) federal agencies. It is recognized that some
of the effects of the Initiative are transfers rather than costs. Second, costs are provided for
each major provision of the Initiative. For comparison with monetized benefits in urban areas,
incremental costs are also reported for three general provisions: storm water Phase I and II,
combined sewer overflow controls, and toxics.
Benefits of the Initiative are reported in physical terms, such as stream miles of
improvements. For urban areas only, benefits are reported in monetized terms; we account for
a large variety of benefit categories, the most important being recreational fishing and
swimming.
Estimates of the Initiative's impact were developed by the U.S. Environmental Protection
Agency (EPA) Office of Water in consultation with EPA's Office of Policy, Planning, and
Evaluation and other federal agencies, including the U.S. Department of Agriculture (USDA),
U.S. Department of the Interior (DOI), U.S. Department of Commerce (DOC) - National
Oceanographic and Atmospheric Administration (NOAA), U.S. Department of Defense (DOD),
and U.S. Department of Energy (DOE), as well as with the White House Office of Management
and Budget (OMB), Council of Economic Advisers (CEA), and National Economic Council
(NEC).
Data Sources. All of the costing work was done in a similar fashion. Given the time
available to prepare the estimates, we could not commission specific new analyses of, for
example, compliance with the CSO policy on actual or model municipal systems. Instead, our
general approach was to first examine the literature of existing studies pertaining to a given
issue. Typically this process identified at least a few relevant studies. Some provisions (e.g.,
nonpoint source controls and certain trading scenarios) had many relevant analyses from which
to draw cost data or information. Other provisions (e.g., the toxics provisions) had few directly
relevant studies for comparison purposes.
The cost estimates are thus largely built on secondary data sources and limited "original"
analysis. Regulatory analyses prepared by EPA for specific program actions also were quite
useful data sources. These included regulatory impact analyses (RIAs) for the Agency's CSO
Policy; the Pulp and Paper and Offshore Oil and Gas Effluent Guideline regulations; the
Economic Impact Analysis of the CZARA; the RIA for the Great Lakes Water Quality Initiative
proposal; and previous reauthorization studies conducted by the Agency in 1991-1992 (draft
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studies were prepared covering storm water, CSOs, and several other topics).
All of the literature and secondary sources described here were used as the basis for our
Initiative cost estimates. When possible, estimates were drawn "as is" from the reports. In
other cases, modifications and re-analyses were required. The specific procedures are described
in more detail in later sections of this report.
Baseline. Some provisions of the 1987 Clean Water Act Amendments have not yet
been implemented. Some provisions of the Initiative will impose new responsibilities and costs
beyond those called for in the 1987 Amendments. Others scale back obligations under the
Amendments and will save the private sector, municipalities, and the federal government
billions of dollars while not compromising environmental quality. Therefore, it is legitimate to
view the baseline from which costs of the Initiative are estimated in two ways: as increments
above current and pending spending or as reductions in costs from stringent interpretations of
the 1987 CWA The stringent interpretations reflect the reading of the law proposed by various
outside groups but do not represent EPA's best interpretation of the law. However, while EPA
believes that these interpretations are stringent and inflexible, they could potentially be adopted
by a court in litigation challenging EPA's interpretation. This report carefully distinguishes
estimates from these two baselines.
The analysis presented here centers on five "sectors" that the Initiative is expected to
affect- the private sector, municipalities, agriculture, state governments, and federal agencies.
Each of these sectors has been the subject of separate analytical efforts, which are described
briefly below:
> Private Sector - The impacts of the Initiative on the private sector (commercial
and industrial) are based on analyses prepared by the Office of Water. Impacts
on the private sector are largely estimated in terms of annualized costs.
> Municipalities - The major impacts of the Initiative on municipalities are a result
of the combined sewer overflow (CSO) and storm water provisions. The Office
of Water developed estimates of the costs of compliance with these provisions.
> Agriculture - The impacts of nonpoint source provisions in the Initiative on
agriculture, primarily farmers, are estimated using the methodology for estimating
costs for the CZARA guidance. These are presented separately to show the
magnitude of the costs on this sector.
» State Governments - Estimates of the Initiative impacts on state water programs
were prepared by the Office of Water, in consultation with water programs
officials from seven states (Maryland, Missouri, North Carolina, Nevada, Ohio,
South Carolina, and Texas). The state analysis considered the administrative
costs of new provisions on the state water programs as well as unfunded 1987
CWA requirements. Pre-1987 expenditures, estimated to be about $2.7 billion
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per year for administration and compliance (EPA, 1990b) are not included here
because the cost of complying with current and future water quality standards
could not be estimated.
* Federal Agencies - The impacts of the Initiative on federal agencies were
developed by the respective agencies and reported to EPA. Impacts include the
costs of additional staff (including salaries, benefits, and overhead), as well as
additional extramural contract support necessary to implement and comply with
the Initiative provisions. Federal agencies represented in the analysis include
EPA, USDA Soil Conservation Service (SCS) and Forest Service (FS) DOI
NOAA, DOD, and DOE.1
Consistency in Benefit and Cost Estimation. To assure that urban area benefits and
costs are comparable, a number of steps v/ere taken. The costs and benefits are presented in
annualized 1993 dollars. Benefits are discounted using three different rates (zero, three, and
seven percent), and assuming that they are fully in place in 15 years. This procedure is
necessary to account for the fact that benefits or costs experienced later in time are worth less
than those experienced sooner. The nature of environmental risks is that it will take time to
fully attain many of the projected water quality improvements and economic benefits. Costs are
annualized at seven percent.
Uncertainties in Estimating Costs. To account for the uncertainty inherent in estimating
costs for various provisions, we have used ranges of likely values where possible. The cost
estimates are based on best professional judgment about the controls likely to be imposed. In
some instances, however, these controls may be insufficient to meet either current or future
water quality standards, and additional more stringent control could be adopted. The cost
estimates do not include any such additional controls because of the difficulty of estimating their
magnitude. To the extent that additional controls are needed to meet water quality standards
there would be additional costs. '
The remainder of this report presents the results of cost and benefit analyses of the
Initiative's provisions.
1 Sources include: USDA (1994); DOI (1994); DOD (1993a and 1993b); NOAA (1993); and DOE (1993).
4
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3.0 Nonpoint Source Controls
The Initiative's provisions would require all states to strengthen their nonpoint source
(NFS) management program for impaired, threatened, or special protection areas. EPA would
develop guidance for states to use in developing and implementing their nonpoint source
management program which would require nonpoint "sources" to adopt incremental compliance
actions, including best available management measures.
As an alternative to a comprehensive NPS program, states could address NFS pollution
problems under a watershed approach using site-sjjecific plans adapted to local conditions. EPA
estimates that under either alternative, similar sources would be addressed using similar
mitigation methods. Controls under a watershed approach would be developed following an
assessment of water quality problems at the local level, and would be more targeted in
comparison with the comprehensive NPS program. Therefore, the NPS control costs would
probably be somewhat less under the watershed approach, although the order of magnitude of
costs would be similar using either approach.
States will have 2l/z years to develop and submit their revised NPS management
programs, with implementation to occur over a subsequent 5-year period.
3.1 Private Sources
Nonpoint sources that these provisions address can be divided into several "sectors," each
of which may contribute one or more categories of pollutant loadings in a variety of ways. The
major NPS sectors are shown in Table 1, with siome of the activities that contribute nonpoint
pollutant loadings and some of the control alternatives that may be called upon to mitigate them.
ERG, 1993, developed estimates of the costs of a national NPS control program using
models developed for EPA in support of the 1990 Coastal Zone Act Reauthorization
Amendments (CZARA) (RCG/Hagler, Bailly, 1992; hereafter referenced as the CZARA
Regulatory Impact Analysis, or RIA). These models calculate the costs and impacts of NPS
controls in the above sectors. The CZARA RIA estimated the costs of control in the U.S.
coastal zone, which was defined to include counties in which at least 15 percent of land area
drains into coastal waters. Costs of controlling nonpoint sources in the coastal zone were
estimated to be between $260 million and $436 million per year (see Table 2).
To estimate the cost of the Initiative's NPS provisions, a coastal NPS program is assumed
to be fully implemented in the coastal zone, as required under CZARA. The focus of the
Initiative NPS provisions will therefore be on nonpoint sources in the noncoastal zone.
Table 3 shows a marked difference between the coastal and noncoastal zone in terms of
population density and land area. Accounting for 82 percent of the land area and only 48
percent of the population, the population density in the noncoastal zone, at 41.4 persons per
square mile, is only one-fifth that of the coastal areas. Because of this, agricultural and forestry
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NPS control measures will be relatively more important in the noncoastal zone, and urban runoff
measures will be relatively less important.
Cost estimates developed for the coastal zone were extrapolated to the noncoastal zone
using appropriate factors such as the noncoastal zone's share of land area, population, farmland,
cultivated cropland, and so on. A detailed methodology can be found in ERG, 1993.2 The
CZARA RIA's costs used for the extrapolation were based on unit control costs (e.g., $/acre)
and need estimates (e.g., percent of acres requiring treatment) that may differ between the
coastal and noncoastal zone. While values for these variables may differ between the coastal
and noncoastal zone, time did not permit the development of specific parameters for the
noncoastal zone. In some cases, however, the coastal zone parameters are themselves based on
national data, hence no additional bias is introduced by using them here.
The Initiative recommends application of NPS management measures in impaired,
threatened, or special protection areas only, making it necessary to identify the sources located
in such areas. Although no comprehensive data exists to link sources of nonpoint pollution to
specific water body impairment, EPA's Section 305(b) survey does provide estimates of the
number of water bodies (river miles, lake acres, and estuary square miles) that do not fully
support their designated uses. This data was judged to be appropriate and to provide a
reasonable basis for estimating the extent of need for a national NPS control program.3 Because
of the uncertainty in predicting the number of new sources that would be impacted by the
Initiative, no attempt is made to estimate costs of NPS management measures for new sources.
EPA's most recent Section 305(b) survey indicates that approximately 33 to 50 percent
of water bodies nationally do not support, only partially support, or threaten their designated
uses (EPA, 1992). ERG used these percentages to calculate the potential cost of nonurban NPS
controls in impaired or threatened noncoastal watersheds from the cost estimates derived for the
entire noncoastal zone. In urban areas, the factor used to represent impaired or threatened
waters was 25 percent.4
2 For example, the costs of grazing management control in the coastal zone were estimated at $2.8 million per
year. The coastal zone accounts for 25.3 million of a total of $515.8 million grazing acres, or 4.9 percent of total.
The total costs of grazing controls nationally are $424.5 million ($2.8 million divided by 0.049). Costs outside the
coastal zone are then $403.7 million. In Table 2 these costs are further adjusted to account for the fact that NPS
controls would be required in impaired areas only. Assuming that between 33 percent and 50 percent of grazing
acres in the noncoastal zone are impaired, the costs of grazing controls are between $133 million and $202 million.
The 305(b) data indicate the water quality and impairment sources of water bodies assessed by the states.
Nationally, the assessed percent of river miles, lake acres, and estuary square miles varies significantly. EPA
assumes that the water bodies assessed are reasonably representative of all water bodies nationally, i.e., neither
higher nor lower quality water bodies are over-represented in these data.
4 Best Professional judgment applied to 305(b) data shows impairment in urban areas as follows: rivers (5
percent); lakes (14 percent); and estuaries (19 percent). The sum of rivers and lakes is used a basis for percent
impairment.
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The national costs of a NFS control program, extrapolated from the CZARA analysis of
costs in the coastal zone, were then adjusted to account for the fact that NFS controls would be
required in impaired or threatened areas only. The; percentage of land area requiring treatment
or the percentage of sources requiring control is assumed to be proportional to the percentage
of water bodies that are either impaired or threatened. Thus, the costs of control in impaired
or threatened nonurban areas are estimated to be between 33 and 50 percent of the costs for a
national program in noncoastal zone. Similarly, the costs of control in urban impaired or
threatened areas are estimated at 25 percent of the national costs. The costs of the NFS program
in threatened or impaired areas are shown in the final column of Table 2.
Because the noncoastal zone is, relatively speaking, more rural than the coastal zone, the
nonpoint source control costs are dominated by agricultural sources, while control costs for
urban sources are relatively less important. In the noncoastal zone, agricultural controls are
estimated to account for between $1.06 billion and $1.83 billion, as shown in Table 20. The
costs of nutrient and pesticide management, while estimated at between $461 million and $845
million, are largely offset by savings in chemical consumption that will accompany the
application of these measures. Thus, total net costs for all sources are $595 to $985 million per
year [$1.06 billion - $1.83 billion (from Table 20) less $461 million - $845 million (from Table
21)].
Potential incremental cost for urban nonpoint sources due to hydromodification and storm
water controls is estimated to range between $233 million and $388 million per year (Table 20).
Thus the total incremental cost to all private sources is between $0.83 billion and $1.37 billion
annually (sum of $595 million to $985 million'and $233 million to $388 million). Current
expenditures on nonpoint sources are between $1 and $1.3 billion, as shown in Table 19.
In a separate analysis, USDA's Soil Conservation Service (SCS) has estimated that the
agricultural NFS controls alone will lower producers' surplus in the agricultural sector by
approximately $1.8 billion per year (USDA, 1994). The annual increase in consumer cost for
food is roughly equal to the decline in government subsidy payments. This figure was derived
using an entirely different modeling methodology that simulates the impact of the NFS controls
on the affected agricultural sectors. This approach allows for the effects of increases in
producers' costs for bringing various commodities (e.g., crops, dairy, livestock) to market to
filter through the economy. One reason for the considerably higher cost estimate compared with
the extrapolation discussed above is that credits for savings in pesticides and nutrients (through
the nutrient and pesticide NFS management measure) are considerably lower. This reflects
differences between USDA and EPA beliefs concerning the potential for such measures to reduce
chemical requirements. USDA/SCS believes that these estimates are high and that available
alternatives, if used, could result in lower costs.
3.2 Municipalities
The NFS control provisions, particularly the urban runoff measures, will affect
municipalities that will be required to implement controls for road, highway, and bridge
-------
maintenance, among others. Costs for these measures are included in the costs for urban
controls shown in Section 3.1, Private Sources.
3.3 State Water Programs
The NFS control provisions are estimated to cost state water programs $10 million per
year, based on estimates derived in the State Program Costs study (EPA, 1993f).
3.4 Federal Agencies
The impacts of the NPS control and watershed provisions on federal agencies are
estimated to range from $118 million to $210 million per year, as shown in Table 4.5 These
resources will be used by: USDA/FS to develop watershed management plans for federal forests;
DOI, to assist in identifying impaired waters and preparing NPS plans; EPA, to provide
guidance to states on nonpoint sources and watershed management; NOAA, to assist in
watershed identification and designation; and DOD, to address NPS discharges from defense
facilities.
3.5 Benefits6
Methodology
To derive a qualitative estimate of the potential environmental benefits that could result
from implementation of the Initiative's recommendations for strengthened State NPS programs,
the following steps were taken:
(1) An analysis of State section 305(b) Water Body System (WBS) data was performed
to determine the most prevalent combinations of nonpoint sources and causes (pollutants)
associated with impaired and threatened waters,
(2) Management measures specified by EPA in its "Management Measures Guidance"
were assumed to be the "best available management measures" that would be implement-
ed within 7*/2 years of passage of Clean Water Act amendments,
(3) The likelihood that the management measures would measurably improve the water
quality (within 10 to 20 years) in those threatened and impaired waters was projected for
5 USDA's Soil Conservation Service has indicated that if implementation is their responsibility, the cost would
range between $211 and $540 million per year to assist the farmers with implementing NPS control measures.
See also the EPA (1994) background paper "CWA Benefits of Nonpoint Source Controls," January 1994.
These estimates are not net of CZARA benefits and do not account for potential benefits from the implementation
of the Farm Bill of 1990. Therefore, the benefits associated with nonpoint source controls may be somewhat
overestimated.
8
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each combination of water body type, use support status, and prevalent combination of
nonpoint sources and causes. The 10- to 20-year timeframe was chosen based upon
extensive experience in NPS programs, as well as on studies that either demonstrate or
project lag times of 10 or more years before the water quality benefits from pollution
control efforts can be measured in water bodies;
(4) The overall impact of implementation of the best available management measures
was estimated by summing, by water body type, the length or area of water body for
which measurable water quality improvements could be expected,
(5) Factors that could either increase or decrease the likelihood of measurable water
quality improvement were identified,
(6) All major assumptions made in the analysis were identified and evaluated with regard
to their impact upon the validity of the analytic results,
(7) Selected case studies were identified to gauge the validity of the analytic results and
to illustrate the significance and specifics of study findings.
Discussion
The Water Body System (WBS) currently contains data from 1992 for 30 entities. Not
all of the 30 entities reported data for all water body types, however. Some key States for
which data are not reported in the WBS include -California, New York, North Carolina, Florida,
Illinois, Minnesota, Arizona, Colorado, Idaho, and Oregon.
For this analysis, rivers (28 entities) and lakes (24 entities) were selected. Very little
data were available for estuaries, coastal waters, and wetlands. The sources considered in the
analysis were agriculture, silviculture, construction/urban, hydromodification/habitat
modification, point sources, and other. Mining, Isind disposal, septic systems, and mannas were
among the sources included under "other." Point sources included all point source categories
and subcategories.
The causes (pollutants) selected for the analysis were nutrients, pesticides, metals,
siltation, organic enrichment/dissolved oxygen, salinity, flow alteration, other habitat alteration,
pathogens, oil and grease, suspended solids, and total toxics. The beneficial uses affected were
not explored in this analysis, but EPA (1992) has summarized such information from State
section 319 assessment reports. For the 20 states reporting in this analysis, EPA showed that
wildlife (37 percent of threatened or impaired waters), recreation (22 percent), fishery (15
percent), agriculture (12 percent), and drinking (9 percent) were the major river uses affected,
while for 18 states reporting the major lake uses affected were recreation (25 percent), wildlife
(19 percent), fishery (16 percent), agriculture (13 percent), and drinking (13 percent).
To obtain summaries of the most prevalent combinations of sources and pollutants by
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water body type and use support type (fully supported, fully supported but threatened, partially
supported, not supported), some initial assumptions were made of the most likely candidates for
prevalent combinations." These assumptions were based upon 305(b) report data and related
data. The goal was to account for two-third to three-fourth of the impaired or threatened waters
for each water body type with information on prevalent combinations. In other words if 75
percent of the threatened lake acres for the 30 reporting states was accounted for by identifying
three combinations of sources and pollutants, then those three combinations would be identified
as the prevalent combinations," with the remaining 25 percent accounted for by "other."
Table 5 shows the impaired and threatened river miles for the 28 entities reporting It
also shows the share of those miles for which each of the major sources contributes to the water
quality problem. For example, agriculture is a source listed for 79 percent of the partially
supported river miles. Table 6 shows the mileage for each of the major sources where it is the
fiOly listed source. It is important to note that data in Table 5 are not additive, while data in
Table 6 are additive.
While agriculture contributes to the problems in 44,700 of 56,600 partially supported
river miles (Table 5), only 18,400 of those miles (32 percent) (Table 6) have agriculture listed
as the fiQly source. This finding supports the approach of looking at prevalent combinations of
sources and pollutants. Due to the very large number of possible combinations of sources and
pollutants for each water body, selecting a subset of combinations for analysis was necessary
based upon knowledge of the WBS data base. The combinations of sources shown in Tables 5
and 6 are those for which a significant percentage of threatened and impaired waters were
identified. Due to the extremely small numbers resulting for the combinations of sources and
causes, those data are excluded from the analysis.
Table 7 shows the impaired and threatened lake acres for the 24 entities reporting
excluding the Great Lakes. It also shows the share of those acres for which each of the major
sources contributes to the water quality problem. For example, "urban" is listed as contributing
to the water quality problems in 15 percent of lake acres not supporting uses Data in Table 7
are not additive. Table 8 shows the acreage for each of the major sources where it is the only
listed source Data in Table 8 are additive. While "urban" contributes to the problems"^
75,200 of 490,000 lake acres not supporting uses (Table 7), only 39,300 of those acres (52
percent) (Table 8) have urban listed as the only, source. Due to the extremely small numbers
resulting for the combinations of sources and causes, those data are excluded from the analysis.
The management measures applied in this analysis are listed in Figure 1. These measures
are primarily pollution prevention measures, yet the analysis for CWA calls for attention to
impaired and threatened waters. The general lack of remediation measures in this list will cause
a lower expectation of water quality improvement than would otherwise be assumed if
remediation measures were included. The analysis assumes that all measures were applied as
systems and that whole watersheds were treated.
The relative likelihood that the management measures would measurably improve the
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water quality (within 10 to 20 years) of those threatened and impaired waters was projected for
each combination of water body type, use support status, and prevalent combination of nonpoint
sources. These projections were based upon best professional judgment, as applied in a round-
table discussion of each "prevalent combination" of sources, the management measures that
could be applied to address them, the needs for addressing fully the types of problems identified,
and the type and level of pollution control or treatment provided by the management measures
compared with the needs for addressing the problems.
The projected likelihood that the management measures will measurably improve water
quality is expressed as "high," "medium," and "low." High likelihood can be interpreted as a
67 to 100 percent chance that measurable water quality improvement will occur within the 10-
to 20-year timeframe, subject to the assumptions specified in this analysis. Medium likelihood
is a 34 to 66 percent chance, and low likelihood is a 0 to 33 percent chance.
It is important to note that because the management measures being considered are
largely pollution prevention measures, we believe that these measures have a high probability
of protecting waters currently fully supporting beneficial uses. In other words, we believe that
full implementation of the management measures will maintain full support of uses on 63,500
miles of river (28 entities) and 1.15 million acres of lake (24 entities). The results of this
analysis for rivers is shown in Table 9, while the lake results are shown in Table 10.
Summing by water body type, the data in Tables 9 and 10 provides an overall estimate
of the likelihood that full implementation of the management measures will result in measurable
water quality improvement.7 Table 11 shows that measurable water quality improvement is
anticipated to occur with high likelihood in 8,300 miles of impaired and threatened river miles
in the 28 entities reporting. This represents 7 percent of the total impaired and threatened river
miles reported by those entities. Water quality in ;m additional 50,200 miles, or 45 percent, has
a medium likelihood of improving measurably.
The preceding projections only apply to the 28 states that reported under section 305(b).
Given similarities in use support and major sources, EPA projected that for all 54 states and
territories, 156,200 river miles, that are impaired or threatened, will show measurable water
quality improvements, as shown in Table 12. About 10 percent of these river miles are given
a high likelihood and roughly 46 percent a medium likelihood. EPA estimates that less than
30,800 threatened and impaired river miles are covered under CZARA and would not be
affected by this provision.
Table 13 shows that measurable water quality improvements are anticipated to occur with
high likelihood in 225,200 acres of impaired and threatened lake acres in the 24 entities
reporting, excluding the Great Lakes. This represents 10 percent of the total impaired and
7 For the purposes of this assessment, EPA has defined the term "measurable water quality improvements" to
generally mean: "statistically significant improvements in measured chemical, physical, and/or biological monitoring
parameters over a 10- to 20-year period."
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threatened lake acres reported by those entities. Water quality in an additional 1.15 million
acres, or 53 percent, have a medium likelihood of improving measurably. Given similarities in
use support and major sources, EPA projected that for all 54 states and territories, 7.1 million
lake acres, that are impaired or threatened, will show measurable water quality improvements,
as shown in Table 14. About 10 percent of these lake acres are given a high likelihood of
improvement and about 58 percent are given a medium likelihood. The total lake acreage that
may benefit from the implementation of CZARA, which is oriented towards coastal water
bodies, will be nominal except in Florida and Louisiana. (The Great Lakes were not included
in either projection.)
Many factors and assumptions were identified that could either increase or decrease the
likelihood of measurable water quality improvements. These include:
• Management measures are generally pollution prevention measures. If remedial activities
accompany the measures, then the likelihood of water quality improvement should
increase.
• Rapidly flowing systems and systems with short hydrologic retention times have a greater
chance of achieving water quality improvement in 10- to 20-years, while slow-moving
systems and systems with long hydrologic retention times have a lesser chance of
achieving water quality improvement.
• The intensity of land-based activity will affect the likelihood of achieving water quality
improvement. For example, a rapidly urbanizing area will result in much more
construction and pollutant loading than a slowly urbanizing area where the same
measures are applied.
• Rapid changes in pollutant loadings to lakes may result in changes at the sediment-water
interface that cause a short-term increase in flux of pollutants (e.g., phosphorus) from
bottom sediments. This may cause temporary delays in achieving water quality
improvements, and sometimes temporary decreases in water quality.
• Management measures are fully applied within 2 to 3 years. This includes full
application of measures such as in-stream and riparian habitat restoration, and other
measures for which states are given considerable latitude.
• Management measures are well designed, implemented, operated, and maintained.
• Point source controls will be needed in conjunction with NPS controls where both
sources exist, so these situations could not be evaluated in this analysis.
• The analysis assumed a baseline of low to nonexistent watershed management. This
results in an assumption of greater possible water quality improvement than would be
possible if some management existed. To partially adjust for this, the analysis employed
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conservative assumptions of water quality improvement resulting from management
measure implementation.
• Each source identified as a "prevalent combination" was considered to be a typical
example rather than an extreme example. In other words, the treatment needs were
considered to be "average."
• Each water body problem was assumed to be independent of the other water bodies.
• Water bodies were assumed to be "normal" (e.g., second order stream) rather than
"special" (e.g., ephemeral stream).
Selected case studies were identified to gauge the validity of the analytic results, and to
illustrate the significance and specifics of study findings. These can be found in Appendix A.
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4.0 Storm Water
EPA's current Phase I storm water program requires NPDES permits of cities and
counties with municipal separate storm sewer systems (MS4s) serving populations of 100,000
or more and "storm water discharges associated with significant industrial activity." The Phase
II program, currently suspended due to a Congressional moratorium, could require permits for
all private sources of storm water (commercial, industrial, retail, and institutional) and all MS4s
serving all populations that have the potential to affect water quality. In the Initiative, EPA has
addressed the potentially high costs of the Phase II program while still providing protection from
private sources and additional MS4s.
The "worse case" scenario for storm water permitting reflects the most inclusive option
of all potential options that EPA would consider in proposing rules for the types of facilities
covered under Phase II. If EPA were to propose regulations for permitting Phase II facilities,
EPA may propose to cover only a portion of these facilities, based on consideration of costs
incurred and environmental benefits gained. EPA could propose regulations covering the same
facilities to the same extent as suggested in the Initiative.
The Initiative's Phase II program will focus on system-wide permits for MS4s in Census-
designated urbanized areas~i.e., areas with a population of 50,000 or more and a population
density of 1,000 persons per square mile. The Census Bureau has identified 396 such urbanized
areas nationwide. Phase II MS4s will be required to implement storm water management
programs that are subject to a "maximum extent practicable" (MEP) standard. These programs
will, at a minimum, address: (1) nonstorm water discharges to their systems (i.e., illicit
connections) and (2) storm water runoff from growth and development and significant
redevelopment activities (including discharges from construction of less than 5 acres) and, where
appropriate, those Phase II sources causing water quality impairment.
Where the NPDES authority deems it necessary, MS4s in the 138 urbanized areas
associated with a Phase I permitted MS4 may be required to have a more comprehensive storm
water management program (consistent with the Phase I storm water requirements). The
comprehensive storm water management programs would cover Phase II light industrial,
commercial, retail, and institutional storm water sources under a municipality's storm water
permit. The NPDES program would not cover Phase II sources not addressed through a
municipal program. Such discharges could be addressed by the NPS program if they were a
targeted source.
4.1 Private Sources
Under a stringent interpretation of the CWA, the current Phase I program is estimated
to cost industrial permittees $3.99 billion per year, while Phase II under a similarly stringent
interpretation could cost as much as $16.23 billion in annual costs.
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ranges hen ** "fT**0* * estimatinS *e potential costs, EPA has developed
Sws: C°nSlderaWy' imp°sin* cosf:s of b*ween $0.34 billion and $1.67 billion
10,000 facilities x $22,340/facility
28,000 facilities x $34,700/facility
96,000 facilities x $630/facility
269,000 facilities x $l,885/facility
100,000 sites x $630/site
100,000 sites x $l,885/site
TOTAL
Low
$0.22 billion
$0.06 billion
$0.06 billion
$0.34 billion
High
$0.97 billion
$0.51 billion
$0.19 billion
$1.67 billion
COSt f°r m -- ».22
sw^^
'
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that the moratorium will expire, the Initiative will avoid costs (or yield a cost savings) of
between $14.6 billion and $15.9 billion.
in Table 21.
4.2 Municipalities
between $1.8 and $2.7 billion per year.
stom Wattt penm'
Applications" (EPA, 1993c).
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a comprehensive plan above the cost of addressing growth and development and illicit discharges
will be in the range of $8.58 and $13.28 per capita. The total cost of the comprehensive
coverage will vary from a low of $0.05 billion to a high of $0.24 billion.
EPA identified 29 million people in another 258 UAs who will be affected by the Phase
II provisions. The cost of compliance will vary from $15.33 per capita to $23.72 per capita.
The total cost of this coverage will be in the range of $0.44 billion and $0.69 billion. The final
element of this cost on municipalities is the cost of addressing private sources and industrial
look-a-likes that impact water quality in areas without the comprehensive program and in areas
with combine sewers. At a per capita cost of $2.00, EPA estimates that about 75.7 million
people will incur $0.15 billion. At a per capita, cost of $5.00, the upper-end cost would be
$0.38 billion.
Low
25.3 million population x $15.33 per capita $0.39 billion
25.3 million population x $23.72 per capita
6.33 million population x $8.58 per capita
17.7 million population x $13.28 per capita
$0.05 billion
29.0 million population x $15.33 per capita $0.44 billion
29.0 million population x $23.72 per capita
75.7 million population x $2.00 per capita
75.7 million population x $5.00 per capita
TOTAL
$0.15 billion
$1.03 billion
High
$0.60 billion
$0.24 billion
$0.69 billion
$0.38 billion
$1.91 billion
The total cost to the municipalities of the proposed Phase II requirements is between
$1.03 billion and $1.91 billion, as shown in Table 20.
Compared with the cost of Phase II requirements under a stringent interpretation of the
current law, total savings to municipalities will be between $755 million and $850 million per
year.
4.3 State Water Programs
The impacts of the Phase II storm water provisions on states have not been estimated but
are expected to be minimal.
4.4 Federal Agencies
Additional costs of the storm water provisions on federal agencies will total $19 million
per year. EPA will account for $2 million per year of this cost, and DOI will account for $17
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million per year.
4.5 Benefits9
The benefits of storm water control as proposed in the Initiative are based on numerous
case studies and are summarized as follows:
*• 75 to 80 percent reduced loadings in urbanized areas prior to and during
development,
> 15 to 25 percent reduced loadings in areas already developed,
> Greater environmental protection at lower cost,
> Improved water resource quality, habitat, and aquatic life; reduced flooding;
improved recreational opportunities; increased commercial fishing; improved
human health; and increased employment.
(Note that more cost-effective and institutionally feasible prevention and management methods
are available for new development than for areas that have already been developed.)
Case Studies10
Bellevue, Washington (see longer summary in Appendix B)
Bellevue has a population of nearly 87,000 and covers a 30-square mile area that contains
five lakes and over 50 miles of open streams. The city established a storm water utility in 1974
to maintain a hydrologic balance, prevent property damage, and protect water quality.
The city requires newly developing areas to include on-site storm water management that
provides protection for 24-hour, 100-year storm events.
Examples of program benefits:
Flood control. One of the most successful aspects of the program is flood
control, which relies on eight remote-controlled regional detention basins along
major stream corridors to monitor rainfall, stream flow, and water levels. This
helps ensure that flood gates control peak flows. Small detention basins reduce
peak flow rates up to 60 percent, providing flood and stream-bank erosion control
and protecting stream-side property.
9 See also the EPA (1994e) background paper "CWA Benefits of Storm Water Controls," January 1994.
10 Costs for these case studies were not available and hence are not included here.
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Reduced property damage. As a result of storm water controls over the previous
10 years, property damages were avoided during a 100-year storm in January
1986.
Reduced pollutant loadings. Runoff concentrations of lead and total solids were
reduced by 10 to 25 percent through biannual cleaning of storm drainage inlet
pumps and catch basins; oxygen demanding substances, nutrients, and zinc
concentrations were reduced by 5 to 10 percent. Conventional street-sweeping
operations reduced toxic loadings by 5 to 10 percent. Installation and mainte-
nance of oil/water separators reduced floatables in the drainage system.
Reduced illegal dumping. Dumping of motor oil and debris hi storm drains was
significantly reduced through increasing public awareness of storm water issues
and volunteer stenciling of storm drains. A recent survey indicates that 85
percent of area residents dispose of used oil at a recycling facility.
Increased recreational opportunities. Clean-up of Mercer Slough (a 325-acre
wetland) along with stream and wildlife enhancement of the park resulted in
increased canoeing on the slough and increased visitation to the park's trails.
Murray City, Utah
Murray City (population 31,000) worked with the Utah Department of Transportation
(DOT) to develop a storm water control system for runoff from a 4,.5-mile stretch of highway
in conjunction with the construction of an 18-hole, 135-acre municipal golf course.
Storm water runoff from the highway and subsurface waters is collected and routed
through a series of streams and wetlands into four ponds on the golf course.
Examples of program benefits:
Reduction in pollutant loadings. The pond system removes approximately 90
percent of the sediment, oil and grease, and dissolved materials from the highway
runoff.
Flood control. The system successfully handled the runoff from two 25-year
storms.
Savings in irrigation water costs. The detention ponds provide 7 acres of flood
retention area and created nearly 11 acres of wetlands. The ponds also provide
water to irrigate the golf course, which saves nearly $80,000 per year in watering
costs.
Savings in highway construction costs. Because runoff was diverted to irrigate
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the golf course, DOT saved $300,000 in land acquisition and storm water piping
costs by eliminating the need to construct a separate storm water discharge system
for the highway.
Orlando, Florida
The city of Orlando (population 160,000) receives over 50 inches of rain annually, over
half of which converts to storm water runoff and flows into the city's 83 lakes. One example
of a project to manage storm water is the creation of the Greenwood Urban Wetland, which
consists of several ponds in a series.
Examples of program benefits:
Increased property values. Overall, whenever Orlando constructs a storm water
control lake, property values in that area increase.
A savings was realized in construction of the Greenwood Urban Storm Water
Control Wetland with the sale of fill dirt that was excavated ($5/cubic yard).
Creation of a natural park. The Greenwood Urban Wetland created a natural
park atmosphere (with footbridges, walking paths, picnic areas, and opportunities
for observing wetland wildlife) in an urbanized area.
Irrigation and drinking water supply. Cleansed storm water is used to irrigate the
upland areas of the park, which conserves the drinking water supply.
Santa Clara Valley, California
Santa Clara Valley has a municipal storm water permit covering 15 co-permittees
(14 municipal entities and one water control district). Three of the municipalities have
populations over 100,000, four are between 50,000 and 100,000, and seven are less than 50,000.
Transportation activities have been identified as potentially the most significant source
of storm water pollutants. Copper and zinc have been identified as significant contaminants in
the storm water runoff into south San Francisco Bay. These metal are carried by suspended
particles. Brake pad dust is believed to be a major source of the copper.
Examples of program benefits:
Significant reduction in copper loadings. Street sweeping activities clean 19,000
miles per month and have prevented 2,500 pounds of copper and 46,000 cubic
yards of material throughout the area from entering storm sewers.
~ Reduction in floatables. Cleaning 34,000 catch basins has removed 1,000 cubic
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yards of material. Inspection and cleaning of 160 miles of conveyances has
removed 400 cubic yards of material.
Identification of illegal dumping activities. The co-permittees identified 867 cases
of illegal dumping, of which 700 have been resolved.
Tulsa, Oklahoma
The city of Tulsa (population 367,000) has been recognized as having an effective storm
water management program. EPA recently issued a draft municipal storm water permit for
Tulsa.
Discharges from Tulsa's storm sewer collection system were identified as a source of
pollutant loadings in the Zinc Lake portion of the Arkansas River. The storm sewer's discharges
showed a high concentration of bacteria.
Examples of program benefits:
Removal of suspended solids. Msa estimates that its construction site storm
water controls average 70 percent effectiveness in removing total suspended solids
from storm water runoff. In addition, the city estimates that its street sweeping
and structural operation and maintenance reduce suspended solids by up to 50
percent; metals by up to 10 percent; total solids and lead by 10 to 25 percent; and
oxygen demanding substances, nutrients, and zinc by 5 to 10 percent.
Improved Water Quality in the Arkansas River. The city identified 35 illicit
storm sewer connections drained into Zinc Lake and the Arkansas River. Tulsa
removed these discharges from the storm sewer system and states that water
resource quality has improved as a result.
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5.0 Combined Sewer Overflows
Combined sewer overflows (CSOs) occur in sewer systems that combine sanitary sewage
and surface runoff. When storms occur, the combined sewer system (CSS) capacity is exceeded
and the mixture of sewage, untreated industrial and commercial wastes, storm water runoff and
other waste in the system is discharged to surface waters. Human and animal waste, pollutants
from industrial and commercial sources, trash, and oil and grease are discharged.
EPA's CSO Control Policy (EPA, 1993) establishes a national framework and clear
expectations for the control of CSOs. The CSO Policy is largely the result of a successful
negotiations with key CSO stakeholders, including municipal groups, environmental groups and
states. It addresses the unique characteristics of CSO controls and balances considerations of
the site-specific nature of CSOs and their environmental impacts. The Policy also provides for
an evaluation of the cost effectiveness of CSO controls; consideration of a community's ability
!?cS?y CS° abatement' and other factors necessary for developing flexible and cost effective
CSO control measures. The Initiative would clarify EPA's authority to implement the CSO
Policy and would provide legislative reference in the CWA for this policy.
5.1 Private Sources
The impacts of the CSO provisions on private sources have not been estimated but are
expected to be minimal.
5.2 Municipalities
EPA's 1992 CSO Needs Survey estimates that the national costs of CSO control with 85
percent capture and primary clarification is $41.2 billion in 1992 dollars (Metcalf & Eddy
1993). EPA estimates that these costs will be borne in years 3 to 15 following CWA
reauthorization (or in some cases, over longer periods). Annual operating and maintenance
(O&M) expenditures associated with these capital expenditures are estimated at $300 million per
year. Annual costs for CSO abatement are thus $3.45 billion per year (see Table 19) derived
by dividing the total CSO capital needs by 13 years and adding the O&M costs ($41.2 billion
•s- 13 years + $300 million = $3.45 billion). EPA plans to implement the Policy and hence
no incremental costs are shown in Table 20.
During the negotiations, CSO stakeholders considered a range of controls and alternatives
that achieved various degrees of environmental and public health benefits at different national
costs. Figure 2 and Table 15 are examples of the data considered and the relationships that exist
between controls and costs. The negotiations focused on the reduction of raw sewage overflow
events rather than on the reduction of pounds of pollutants. Raw sewage overflows were viewed
" CSO "control" is defined based on the goal of "... the elimination or capture of 85 percent by volume of
the combined sewage collected in the combined sewer system during precipitation events on a system-wide average
D3S1S.. • (JDJrAj 1993).
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as the key concern because they result in immediate violations of water quality'Standards and
created immediate public health concerns for the downstream beaches, shellfish beds and
drinking water intakes. With this as a guiding principle, stakeholders focused on the extentof
the reductions of CSO overflow events. Four to six overflow events, equivalent to 85 percent
capture and primary clarification, was determined to be an appropnate target of control, m the
absence of clear date that show the level of control necessary to meet water quality standards.
A municipality may demonstrate that another level of control is adequate to meet water quality
standards.
Full implementation of the CSO requirements, according to one interpretation that is not
shared by EPA, could cost as much as $14.14 billion per year (EPA, 1994d) base<1 on _an
assumption of 85 percent capture with secondary treatment, as shown in Table 22. The Initiative
Lproposing to codify the CSO control strategy that could potential save municipalities about
$10.7 billion annually in avoided costs.
5.3 State Water Programs
The impacts of the CSO provisions on states have not been estimated but are expected
to be minimal.
5.4 Federal Agencies
The additional impacts of the CSO provisions on federal agencies have not been estimated
but are expected to be minimal.
5.5 Benefits
The benefits of the Initiative's CSO provisions will be to reduce the discharge of
untreated sewage and pollutant loadings associated with CSSs. In the affected areas this will
have potentially major economic and environmental impacts, which are discussed below.
Reductions in Volumes of Untreated Sewage and Pollutant Loadings Reduction from
CSOs
On average, CSSs experience 50 to 80 overflow events per year. The number will be
reduced to approximately 3 to 4 events. This will have major implications for the water quality
of the receiving waters, including:
* Reduce the number of water quality standards (WQS) violations for each system
from 100 to 200 days per year to no more than 10 to 20 days per year.
* Reduce CSO discharges from 1,200 billion gallons per year to 180 billion gallons
per year.
^ Reduce annual TSS discharges from 3.7 billion pounds to 1.29 billion pounds.
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the
Reduce annual BOD discharges from 1,150 million pounds to 635 million pounds. "
Reduce by 35 to 65 percent the current annual amounts of the following
discharges: 19 imlhon pounds of ortho phosphate (PO4-P), 95 million pounds of
SSL?I *gr; 18^ UlonP°und!l°f metals (zinc' c°PPer> cadmi™> cooler, lead,
nickel), and 4 million pounds of toxic volatile organics.
Regarding Compliance with CWA and Water Quality
uses because of cso affects
503 square miles of estuaries
132 shore-miles of coastal waters
93 shore-miles of impaired Great Lakes
21,360 lake-acres in fresh lakes
5,163 river-miles
^L^T^011- W^ streamline *e permit writing and water quality standards
s>es, oener aetine the criteria appropriate to support the designated uses of CSO
waters, and result in compliance with applicable state water quality standards.
Shellfishing Restrictions
In 1990, CSOs contributed to prohibitions, conditions, or restrictions on 597 (
or 9.4 percent of the total harvest-limited acreage. Sixteen percent of the limi '
^^2^^^^^^^^ CSOS' Substantial reduction in
Fish Kills
acres
Von8*! ^"^ Water Onality Inventory, 38 states reported 996 fish Mil
rfl nl 1 •' .^enty-f°UT of ^ states ^Ported the number of fish killed: a total
of 36 rmllion. Of the incidents reported, 605 were caused by conventional pollutants (primarily
oxygen-demanding substances), while 135 were caused by toxic pollutes. SixtSn^ates
reported municipal facilities, which may include CSOs, as a source of fish Mils ThTconteols
^SS^S^^'vca^ wm signiflcantly eliminate discharges rf«St ^S
pollutants (BOD) and toxics in concentrations that deplete dissolved oxygen concentrations below
those required to support fish resulting in substantial reductions in Fish Advisories.
Beach Closures
According to NRDC, 1,592 days of beach closures or advisories were issued in 1990,
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2,008 days in 1991, and 2,619 in 1992. CSOs were implicated as an important contributor to
those beach closures.
The presence of plastics and other floatable waste or debris, which in some cases can be
traced to CSO may also prompt health authorities to close public beaches or issue beach
Stories. The floltabJ problem has become particularly acute m some urban areas,
particularly in the vicinity of New York City.
Flooding
Most cities' CSSs were built over 40 years ago. New developments and greased flow
often resuU in sewer surcharge and basements flooding during wet weather, I, ^add^n to
tv damage related to the flooding, clean-up poses senous heath nsks. CSO abatement
wnS help eliminate basement flooding. This has been demonstrated m the City of
Portland, Oregon.
Avoided Drinking Water Treatment Costs
Tinder the CSO Policv the discharge of undisinfected CSOs to surface waters used as
public d^Mng watefsuppIS wm be dranfatically reduced, reducing pathogens and bacteria to
F^that SLdequaSy treated by water supply facilities and resulting in savings in the cost
of drinking water disinfection and a reduction in human health nsks.,
Aesthetic Improvements
CSO abatement efforts will eliminate the discharge of condoms, tampon applicators, and
other sewaee-related floatables that degrade the aesthetic quality of receiving waters limi
r^SLefdTmage property values, and threaten wildlife (by ingestion of or entanglement
in plastic debris).
Other Effects
Jobs Supported
The estimated number of direct and indirect jobs supported by a $1 billion investment
in watered w^ater infrastructure is 16,500, with an additional 16 ;500 ^duc^'
nationwide. According to these estimates, implementation of the CSO Policy
direct and indirect jobs and another 57,000 induced jobs per year.
Public Access
In concert with the construction of CSO controls, Columbus Georgia, cleaned up a
hazardous waste site, refurbished the shoreline of the Chattahoochee River and bu^ ^ a
b^cle/walking path along the River, thus greatly enhancing public access. CSO abatement
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efforts in many other cities will create similar opportunities for significant indirect benefits.
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6.0 Toxics Controls
The Initiative provides additional authority to EPA to limit releases of the most toxic and
bioaccumulative pollutants.
6.1 Private Sources
Currently EPA's primary pollution control efforts are focused on point source discharges
to water. For many pollutants, other sources are the largest contributors of contaminants.
Mercury, for example, one of a limited number of highly toxic and bioaccumulative pollutants,
is present in surface water largely from atmospheric deposition. Restricting or banning the point
source discharge of toxic pollutants may not be the most cost effective approach. A cross-media
approach allows the Agency the flexibility to select the most cost-effective controls.
Due to our inability to predict which pollutants might be impacted and what costs might
be incurred by dischargers, EPA has not estimated the costs of the Initiative's toxics control
provision. The toxics ban/restriction provision would affect private sources, leading industry
to use pollution prevention measures, in-plant controls, and/or new technologies. Restrictions
or bans could be costly. For example, industry estimates the cost of eliminating dioxin from
bleached kraft pulp production at $1.3 billion annually (Phillips et al., 1993). Setting effluent
standards at the detection limit is estimated to cost about $140 million annually (Nicoll, 1994).
However, other sources of dioxin may be more cost effective to control. This provision will
allow the review of all sources in selecting an appropriate source of control.
6.2 Municipalities
The impacts of the toxics provision on municipal sources have not been estimated but are
expected to be minimal.
6.3 State Water Programs
The impacts of the toxics provisions on states have not been estimated but are expected
to be minimal.
6.4 Federal Agencies
The toxics provisions will impose additional administrative costs on EPA, and further
compliance costs on agencies such as USDA, DOI, DOD, and NOAA. EPA will not incur
incremental costs. Compliance by other agencies, will impose estimated annual costs of between
$66 million and $105 million. Table 4 summarizes the impacts of these provisions on the
federal agencies.
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6.5 Benefits12
The Initiative's toxics provisions provide EPA with further authority to restrict or
eliminate discharges of the most highly toxic and/or bioaccumulative pollutants. Reductions in
the magnitude of such releases will have potential benefits on human health and the environment.
Several categories of benefits are discussed below.
Reduced Human Health and Aquatic Life Impacts
> Toxics (bioaccumulative pollutants in particular) are linked with birth defects,
cancer, neurological disorders, reduced IQ, heart disease, and kidney ailments.
> Many aquatic organisms are more sensitive than humans to toxics.
»> Toxics can alter species composition/diversity, increase susceptibility to disease,
interfere with reproduction, reduce viability of young, and increase mortality.
>• Some pollutants are extremely harmful in small quantities and/or build up in the
food chain to produce adverse and long-term effects to human health and the
environment. This is recognized in the Great Lakes, where the United States has
formed an international joint commission with Canada to develop a virtual
elimination strategy for persistent toxic substances. In addition, EPA has
proposed the Great Lakes Water Quality Initiative, which requires more stringent
water quality standards for persistent bioaccumulative pollutants.
> Bioaccumulative pollutants can damage ecosystems by directly eliminating
sensitive species or indirectly causing increased incidence of disease in the
remaining species.
> Some bioaccumulative pollutants may persist in the environment for decades,
posing a continuing threat to humans, aquatic organisms, birds, and other
wildlife.
Decreased Fish Consumption Advisories
*• Some 1,280 water bodies have fish consumption advisories or bans in place to
protect human health,
> Most of the total number of advisories are in Minnesota and Wisconsin.
However, no uniform approach exists among states for issuing advisories,
12
See also the EPA (1994f) background paper "CWA Benefits of Toxics Controls," January 1994.
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* Of the advisories, 60 percent are for mercury, 21 percent for PCBs, and 6
percent for chlordane.
Decreased Amount of Contaminated Sediments
> The U.S. Army Corps of Engineers dredges from 300 to 400 million cubic yards
annually; based on Corps data for 19 districts (out of 30), almost 10 percent of
the dredged material required special handling because of toxics,
* Costs of special handling are highly variable, from as little as $ 10 per cubic yard
to more than $100 per cubic yard (total cost of special handling equals $160
million to $1.6 billion),
* Costs of normal handling is $1 to $10 per cubic yard (total cost if toxics are not
present equals $16 million to $160 million),
> Total estimated remediation costs of PCB-contammated sediments at five
Superfund sites ranged from $93 million to $520 million ($1991).
Case studies illustrating the potential benefits of toxics reduction can be found in Appendix C.
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7.0 Comprehensive Watershed Management
The Initiative provides support for the "watershed management approach," a geographic-
based strategy for addressing water quality problems. Under these provisions, states would
identify and prioritize watersheds, designate watershed management entities, and oversee the
development of watershed management plans. EPA would provide guidance to the states and
to watershed management entities, and would approve state watershed programs. As an
incentive to participate in the watershed approach, states would be eligible to consolidate several
existing grants (SRF excluded) into a multipurpose grant.
7.1 Private Sources
The impacts of the watershed management provisions will be felt when watershed
management plans are developed and the sources contributing to impairment are identified. The
plans will define measures necessary to ensure further progress within the economic capability
of the sources and will include such pollution load reduction allocations for point and nonpoint
sources as are necessary to ensure further progress.
Because of the number of steps that must occur before affected parties would be required
to undertake compliance actions, estimating the potential scope of these impacts is impossible.
For a particular impaired watershed, one can envision a plan that identifies point or nonpoint
sources as contributors to impairment and imposes upon them economically achievable measures
to reduce discharges and improve water quality. Until such plans are developed, however, the
potential overall costs of such requirements cannot be estimated.
7.2 Municipalities
In some watersheds, municipal sources (e.g., sewage treatment facility operation, road
salting, municipal construction, landscaping) may be important contributors to water quality
problems. Watershed management plans may identify these sources and propose new controls
or provide new incentives to reduce their pollutant contribution. As indicated under the private
sources section above, however, the impacts on municipalities will be felt only after watersheds
are assessed, problems are identified, and plans are developed and approved. The contingent
nature of any changes that would be required makes it difficult to estimate the potential impacts
at this time.
7.3 State Water Programs
Impacts of the comprehensive watershed management provisions on state water programs
are estimated at $82 million per year (EPA, 1993f). These costs are attributable to the new
responsibilities states will have for identifying watersheds, designating watershed management
entities, overseeing the development of watershed management plans, and pursuing and
administering any funding for watershed activities.
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7.4 Federal Agencies
Impacts of the comprehensive watershed management provisions on federal agencies are
combined with the costs of NFS control and are shown in Table 4 to total between $329 and
$750 million per year.
7.5 Benefits13
The benefits of the watershed approach are best characterized as including cost savings
due to administrative efficiency and the use of cost-effective control strategies that take all
sources into account.
> A watershed approach allows the development of controls that enable ecosystems
to function properly and recreational opportunities (e.g., fishing, boating, and
enhanced tourist visitation) to increase.
> A watershed approach, particularly when used in conjunction with technical tools
such as Total Maximum Daily Load (TMDL), allows development and
implementation of alternative, cost effective approaches for reducing adverse
impacts on water bodies.
> A watershed approach can go beyond traditional regulatory relationships and
techniques to solve environmental problems. Stakeholder involvement improve-
ments chances of success. Experience has shown the voluntary participation of
interested parties at the watershed level can yield more gains than a traditional
top-down regulatory approach. Watershed management can facilitate local actions
and decisions such as changes in zoning laws that cannot be made effectively at
the federal or state level.
Numerous ongoing watershed projects exist across the country. Below are summaries
of some of the notable projects and their successes:
+ The Boulder Creek, Colorado, Enhancement Project, following a parallel
approach to the TMDL process, addressed elevated in-stream pH, temperature,
and ammonia concentrations, as well as reductions in. fish and macroinvertebrate
species density and diversity. A partnership of local, state, and federal entities
crafted a holistic strategy that combined a point source upgrade at the local
wastewater treatment plant (WWTP), with agricultural NPS best management
practices and riparian zone and in-stream habitat restoration. The total cost of
restoring approximately 5 stream miles is currently estimated at $1.3 to $1.4
13 See also the EPA (1994g) background paper "CWA Benefits of a Watershed Protection Approach," January
1994.
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million, far less than relying on wastewater treatment plant upgrades alone, which
was estimated at $23 million. Restoration of the physical condition of the creek
and its riparian zone has enhanced fish habitat, improved aesthetics, made the
creek more appealing and useful to the community, and resulted in attainment of
water quality goals. Restoration of the creek, as part of a broader watershed
improvement effort, has also increased recreational benefits through the
development of bicycle pathways and educational displays.
The Patuxent River watershed, which drains into the Chesapeake Bay, is situated
between Baltimore and Washington, a rapidly growing area that has experienced
large increases in population over the past decade. By the 1970s the Patuxent had
become one of the most nutrient-enriched systems in the Bay region, with
associated dissolved oxygen and water clarity problems. A plan was developed
in the early 1980s, with the involvement of state agencies, elected officials, local
governments, and scientists, to reduce point and NPS loadings of nitrogen and
phosphorus. Total capital costs for plant improvements from 1980 to 1992 were
$196 million.
Nutrient Loads from the WWTPs have been reduced substantially in the Patuxent
Watershed since 1984. Specifically, phosphorus loads have been reduced by
approximately 75 percent through chemical addition methods and a phosphate
detergent ban instituted in 1986. Nitrogen loads have been reduced by
approximately 35 percent annually and by about 50 percent during warmer
months through implementation of Biological Nutrient Removal (BNR) methods.
The Patuxent River Estuary is already showing positive responses. In the Upper
estuary, total nitrogen concentrations have significantly declined since 1984,
ranging from about 40 percent in the upper tidal fresh water region to about 30
percent in the Oligohaline (slightly brackish) region of the estuary. Total
phosphorus concentrations have declined significantly throughout the estuary,
ranging from 70 percent in the upper tidal fresh water region to about 20 percent
in the Mesohalic (brackish water) region.
In the Tar Pamlico Basin, North Carolina, a nutrient trading program was
developed by a coalition of dischargers, environmental groups, and the North
Carolina Department of Environmental Management. The program allows
dischargers to pay for the development and implementation of agricultural best
management practices, which reduce nutrients by 200,000 kg/yr. When fully
implemented, the trading program will achieve the state's nutrient reduction goals
and address NPS loadings while also reducing the economic burden to municipal
dischargers. In addition, the program is flexible, allowing discharges to trade
reduction debits and credits among themselves, as long as the loading standards
for the basin are met. The trading program is cost effective, with an estimated
cost of $11.8 million for achieving the state's nutrient reduction goal using
agricultural best management practices alone.
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A pollution reduction trading strategy was designed for the Dillon Reservoir,
Colorado, by a committee of local, state, and EPA representatives to control
increased phosphorus loading from urban nonpoint sources, and to accommodate
future development. The trading strategy provides an innovative solution for
controlling phosphorus loading while still meeting water quality goals. The
trading strategy allows wastewater treatment plants to use low-tech, inexpensive
NFS controls for phosphorus removal in lieu of costly point source controls.
Total cost savings are estimated to be $1.33 million.
New York City is seeking an alternative to installing filtration on its Catskill and
Delaware drinking water supplies. By implementing a series of water quality,
operational, and watershed protection criteria, the City anticipates being able to
ensure drinking water quality. The City estimates that the cost of implementing
the criteria would total $1 billion, while the cost of filtration would total $5 to $6
billion. Although New York City has the authority to mandate land use changes,
it has elected to pursue a collaborative effort with other watershed communities.
The plan for watershed protection would include $120 million in cost share to
communities and farmers for both point and NFS controls in addition to land
purchases. Specific land use plans are to be initiated by watershed communities
and farmers, and evaluated to make sure that pollution prevention goals are
reached.
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8.0 Permit Discharge Fees
The Initiative recommends the collection of permit fees to partially offset the cost of
operating the National Pollutant Discharge Elimination System (NPDES), pretreatment, and
sludge programs. For States authorized to administer these programs, the Initiative recommends
collection of fees to cover these programs, and the portion of other State water quality programs
that support these programs, to the extent that these programs are not currently funded by other
sources such as State appropriations or current State permit fees. For the states where EPA is
the regulatory authority, the Initiative recommends collection of fees to cover the full cost of the
NPDES, pretreatment, and sludge programs.
EPA has calculated that States are currently spending $498 million per year to operate
State water quality programs (EPA, 1993f). Of this cost, $250 million per year is for
administering the NPDES and pretreatment point source programs (no State has yet received
authorization to administer the sludge program), and $70 million per year is for nonpoint source
control program. Li addition, States are spending $165 million per year for the standards,
monitoring, and watershed programs. Because these programs support both the point and
nonpoint source programs, EPA attributes 80 percent of the cost of these programs to support
the NPDES and pretreatment programs, with the remaining 20 percent to support nonpoint
source programs.
EPA projects that the Initiative would add $416 million per year to the existing cost for
all States to operate their existing programs. Of this total cost, $179 million per year is for
operation of the NPDES and pretreatment programs in the authorized States and $218 million
per year for the standards, monitoring, and watershed programs in all States. Since only 40
States and Territories are authorized out of a potential total of 57 and only 80 percent of the
standards, monitoring, and watershed programs can be attributed to point source controls, permit
fees would only need to recover $122 million per year (80 percent of 70 percent of States &
Territories of $218 million per year). The total additional fees collected by States would be the
sum of these two components, or a total of $301 million per year.
In the 17 States and Territories where EPA administers the NPDES, pretreatment, and
sludge programs, the cost to EPA of operating these programs is estimated as $83 million per
year. The total fees to be collected under the Initiative is the sum of the EPA and State
collections, or a total of $384 million per year.
8.1 Private Sources
EPA estimates the total permit fees required of private sources to be $290 million per
year. These sources represent roughly 75.6 percent of all the facilities permitted under the
NPDES program. The total fee is based on 75.6% of the total of the fees collected by EPA and
the authorized States.
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8.2 Municipal Sources
EPA estimates the total permit fees required of municipal sources to be $94 million per
year These sources represent roughly 24.4 percent of all the facilities permitted under the
NPDES program. The total fee is based on 24.4% of the total of the fees collected by EPA and
the authorized States.
8.3 Federal Sources
These costs are included in the total fees for private sources. EPA's Permit Compliance
System does not distinguish permits held by federal agencies from non-municipal permits.
8.4 States
EPA estimates that States will spend $10 million per year to newly develop or modify
existing fee systems.
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9.0 Groundwater Protection
The Initiative acknowledges the connection between surface water contamination and
groundwater quality and establishes the protection of groundwater as a specific goal of surface
water programs. EPA believes that implementation of these provisions may help protect
groundwater from contamination originating from surface water discharges.
9.1 Private Sources
EPA estimates that the costs of groundwater protection measures could be between $150
million and $600 million per year (EPA, 1994a). Of a total of approximately 190,000 surface
impoundments, EPA estimates that 17,000 receive nonhazardous industrial waste (and hence are
not covered by the hazardous waste disposal provisions of the Resource Conservation and
Recovery Act, or RCRA) and are located,in urban areas. These include 16,232 industrial and
993 municipal impoundments. Of these, 70 percent or 12,000 are located in vulnerable
groundwater areas and an estimated 6 percent of these (or 720) are located in areas where
groundwater is directly connected to surface water (e.g., floodplains).
The costs to protect groundwater at these sites would range from $740 million (if all
impoundments require clay liners, (the minimum technology) to $2.9 billion (if all impound-
ments require clay, plastic and second clay liners, plus leak detection systems, the maximum
technology). These impoundments would be addressed over the first 5 years following
reauthorization, hence the annual costs are between $150 million and $600 million per year.
9.2 Municipalities
The impacts of the groundwater provisions on municipalities have not been estimated but
are expected to be minimal.
9.3 State Water Programs
The impacts of the groundwater provisions on states have not been estimated but are
expected to be minimal.
9.4 Federal Agencies
The impacts of the groundwater provisions on federal agencies have not been estimated
but are expected to be minimal.
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9.5 Benefits14
The two major categories of benefits from additional groundwater protection measures
are reductions in human health risks and protecting surface water aquatic habitat.
Reduced Human Health Risk
In meeting human health objectives, watershed management programs could play a major
role in helping prevent contamination of all sources of drinking water for public water systems.
Preventing contamination of source waters represents the first line of defense against public
health risks and escalated monitoring and treatment costs associated with meeting surface and
drinking water quality standards.
Protection of Surface Water Aquatic Habitat
Clean groundwater discharging to surface water also has significant ecological benefits,
including:
> Protection of economic benefits of in-stream recreation, fisheries and other
activities,
* Improved water quality and flows,
>> In-stream aquatic habitat protection,
* Preservation of aquatic biodiversity and avoided costs of future endangered
species actions.
In addition, coordinating CWA and Safe Drinking Water Act requirements results in
additional benefits from more efficient management of resource by states.
14 See also the EPA (1994a) background paper "Costs and Benefits Related to Groundwater Provisions in the
Green Book," January 1994.
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10.0 Pollution Prevention Plans
*** E?A ^ authorized states *e discretionary authority to require
as an NPDES industrial user (TO) permit condition.
10.1 Private Sources
aPProximately 65>^ NPDES permittees would be required to
Plans coverin£ toxi' PoUutants. The costs of preparing such plans
are based on costs reported by the State of Washington, which requires similar plans to be
" UtS HaZard°US WaSte RedUCti°n Act °Ver 50° ^ have been deveTopS so
between $10'000 «* $20'000 in labor per pla
nriont cf - t0 prepare similar plans under
onented statutes or regulations. For example, some 20 states have now passed
SSST I?T8 legi,slfon- To the extent that ^^ or IU facil^ies n
prepared such plans and the plans are relevant to the requirements under this provson
of these costs would not be incurred by these facilities.
prevention-
similar n °f P°llution P^vention plans required under the Initiative will be
similar to those in Washington. Assuming that only 30,000 NPDES permittees would need to
mmZ* E^f Phases ^ tMf requirement using a 5^ permit renewal Sd?
,000 facahties will prepare the plans in each of the first 5 years. Total annual costs
' WlU ^ betW6en $6° miUi°n •Imd 12 muchless S
one-
10.2 Municipalities
10.3 State Water Programs
States will incur additional costs for reviewing the facilities' pollution prevention olans
No estimates of the costs for this activity, however, have been developed. P
10.4 Federal Agencies
nreWn1 *°. *™*?? * regulation defining its authority to require pollution
prevention plans as a permit condition, and to provide guidance to states on implementing these
requirements. No estimates of the costs for these activities, however, have
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11.0 Domestic Sewage Exclusion/Pretreatment
Under the domestic sewage exclusion (DSE) industrial facilities rel «^f ?^J
to sewers are exempt from the requirements of RCRA on the assumption that Clean Water Act
11.1 Private Sources
EPA assumes that POTWs would set additional local limits or develop TRAPs that would
allow facilities facing the loss of the DSE to avoid RCRA impacts. EPA estimates that toe
Sti^resSct "nson the DSE would impose additional costs of $282 million per year. Table
16 summarizes the costs of this provision on private sources.
costso
$21,500 per facility per year).
11.2 Municipalities
The impacts of the DSE provisions on municipalities have not been estimated but are
expected to be minimal. EPA has assumed that municipalities will pass on the cost of
developing TRAPs to their dischargers.
11.3 State Water Programs
The impacts of the DSE provisions on slates have not been estimated but are expected
to be minimal.
11.4 Federal Agencies
The impacts of the DSE provisions on federal agencies have not been estimated but are
expected to be minimal. EPA's costs would be for preparing guidance on development and
implementation of TRAPs.
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12.0 Permits/Enforcement/Water Quality Standards
The enforcement provisions described in the Initiative include a
that
the
S4 bene^ T"^ 'r ^^^ ""* ** **** m°re ach the
economic benefits of noncompliance, and facilitate the processing of violation cases The
sr^s' waiver of sovereign immunity for *&* *»- *^£
12.1 Private Sources
Numerous revisions to the enforcement provisions of the CWA will affect private
sources, including new enforcement authorities, changes in fines and Sdto aST
o'n vfoS f ?Tf? enforcement tools- EpA considers any impacts ffi pro"
on violating facilities to be a transfer to the federal government, not a true resource cost The
potential magnitude of the impacts on violators have not been estimated
12.2 Municipalities
are
Uam °n
not been estimated but
12.3 State Water Programs
Impacts of the enforcement provisions on state water programs are estimated at $188
million per year, based on the State Program Costs study (EPA, 1993f). C*umaiea at *188
12.4 Federal Agencies
PDA * C?StS,t° f&1^ agendes °f the new enforcement provisions include additional costs to
from $°32 m^T ^Mr ^ aUth°ritieS «* enfor-ment tools. The^ cost Snge
Jrom $32 miUion to $33 million and are summarized in Table 4.15
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13.0 State Revolving Fund/Construction Grants
The Initiative will expand the scope of projects eligible for State Revolving Fund(SBF)
assistance, encourage projJ targeting and priority setting, and stimulate the delivery of further
assistance to disadvantaged communities.
13.1 Private Sources
The impacts of the new SRF and construction grants provisions on private sources have
not been estimated but are expected to be minimal.
13.2 Municipalities
The new SRF and construction grants provisions will have little impact on municipalities.
Communities that qualify as disadvantaged may benefit from SRF loan forgiveness.
13.3 State Water Programs
State water programs will incur an estimated $8 million annually in additional costs as
a consequence of the revised SRF and construction grants provisions. These estimates are based
upon the State Program Costs study (EPA, 1993f).
13.4 Federal Agencies
The impact of changes in the SRF and. construction grants programs on federal agencies
(namely, EPA) are estimated to be negligible.
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14.0 Monitoring
ur . wil1 encourage EPA to work with states and other federal agencies to
establish minimum requirements for water quality monitoring and reporting. States will be
required to develop a comprehensive water body inventory under a new Section 305(c).
14.1 Private Sources
Changes to the monitoring provisions of the CWA will not have significant additional
impacts on private sources beyond what is currently being performed.
14.2 Municipalities
Changes to the monitoring provisions of the CWA will not have significant additional
impacts on municipalities beyond what is currently being performed.
14.3 State Water Programs
To implement the new monitoring requirements contained in the Initiative states will
incur an estimated $118 million annually in additional costs. These estimates are based upon
the State Program Costs study (EPA, 1993f).
14.4 Federal Agencies
Federal agency impacts of the monitoring provisions will be relatively modest and are
included with the costs of the NFS provisions (Section 3) and watershed provisions (Section 7)
Among the federal agencies, the Forest Service has estimated costs of $37 million per vear to
perform monitoring in federal forests.
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15.0 Abandoned Mines
The Initiative recommends that CWA be amended to change and clarify the NPDES
permitting program to target control measures so as to achieve the greatest improvement in
environmental quality for the limited Federal resources available for inactive and abandoned
mine sites (lAMs) on federal lands without an. identifiable operator.
15.1 Private Sources
The Initiative addresses lAMs only on federal lands, and thus there are no impacts on
private sources.
15.2 Municipalities
The Initiative addresses lAMs only on federal lands, and thus there are no impacts on
private sources.
15.3 State Water Programs
The Initiative addresses lAMs only on federal lands, and thus there are no impacts on
private sources.
15.4 Federal Agencies
Under a stringent interpretation of the CWA, remediation efforts would be needed on all
of the estimated 500,000 lAMs. EPA estimates that, under this interpretation, lAMs that would
need extensive controls range from 15,000 to 50,000. At an average cost of $220,000 per site,
the total remediation cost incurred over three years would be between $3.3 billion and $11.00
billion, or between $1.1 billion and $3.67 billion per year. For the remaining 450,000 to
485,000 lAMs, the annual remediation costs for minimal controls are assumed to be in the range
of $630 per site to $1,885 per site, or between $283 million and $914 million per year. Thus,
the total cost would range between $1.38 billion and $4.48 billion per year, as shown in Table
22.
Under the Initiative, EPA could issue general permits to all federal land managers
responsible for these sites in each state (rather than individual permits to each IAM). These
general permits would require remediation at 15,000 to 50,000 sites that are estimated to cause
water quality impairments. However, these expenditures would be incurred over a ten year
period. Therefore, the total cost would range between $3.3 billion and $11.00 billion, or
between $330 million and $1.10 billion per year, as shown in Table 20. The remaining lAMs,
between 450,000 and 485,000 sites, would not require any controls because they are assumed
to not cause any water quality impairment.
The impacts of the Initiative, compared with the potential mitigation required under
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current programs, will be to reduce potential costs. Total annual cost savings (or costs avoided)
would be between $1.05 billion and $3.48 billion per year (Table 21).
15.5 Benefits16
The major categories of benefits associated with IAM mitigation include:
+ Improved ecological and human health benefits,
*• Increased property values,
> Increased commercial and recreational fishery production,
> Avoided costs of treating drinking water supplies, and
> Decreased water treatment costs for existing mining operations and other
industrial activities.
Mitigating lAMs not only results in restoration of aquatic resources but also can
significantly contribute to the enhancement of water-related activities. In so doing, mitigation
will strengthen an important part of the West's economic base and contribute to ongoing
economic development.
Specific examples of benefits from mitigating lAMs are discussed below.
Fish, Wildlife, and Recreation
* The economic value of recreational fishing on DOI lands has been estimated to
be $4.0 billion per year. EPA estimates that the fishing-related benefits
associated with reducing all IAM impairments total $42 million per year.
> The State of Colorado estimates that the annual revenue associated with fishing
in Golden would increase by $750,000 per year if releases from lAMs discharg-
ing to Clear Creek were mitigated.
Drinking Water
* Westminster, Colorado, estimates that it costs about $15,000 to $20,000 per year
to provide additional treatment of its water supply to remove metals from
upstream IAM sites.
16 See also the EPA (1994b) background paper "CWA Benefits of Mitigation of Inactive and Abandoned Mines
on Federal Lands," January 1994.
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> High concentrations of zinc from lAMs have forced Golden to provide special
waste disposal for sludge from its drinking water system serving 14,000 people.
The city estimates that it spends an additional $15,000 per year for sludge testing,
transporting, and landfilling.
Agriculture
*• lAMs can have adverse impacts on irrigation water supplies. EPA has warned
that the Summitville mine in Colorado may have possible toxic discharges into the
Alamosa River, which irrigates many farms and ranches in the area.
Human Safety and Health
*• Based on data in the Western Governors Association report, lAMs on federal
lands are responsible for accidents resulting in an average of 20 fatalities and 40
serious injuries each year.
*• The National Park Service has identified 9,934 hazards associated with the 2,000
lAMs in the parks, including unmarked mine openings, abandoned explosives,
unidentified chemicals and other wastes, and contaminated streams and lakes used
by park visitors and wildlife.
> Safety risks are expected to increa.se as rural areas of western states become more
populated, and recreation expands on the BLM and FS lands.
+ Some 179 children living within a mile of the Bunker Hill silver mine were at
risk of suffering cognitive skill impairments as consequence of levels of lead in
their blood.
Economic
* A 1993 study of the impacts of the reform of the Mining Act of 1872 estimates
that IAM reclamation activities could generate between 2,000 and 10,000 jobs in
communities suffering from the effects of the mining industry's shrinking
unemployment base. Many of these jobs will rely on workers with experience in
the mining and mineral services who have lost employment with a sluggish
mining industry.
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16.0 Market Incentives - Effluent Trading
The Initiative provides opportunities for innovative approaches to water quality
improvement. The goal is to stimulate cost savings for dischargers, better institutional efficiency
in program design and implementation, and support for continuous efforts to loadings reductions
and environmental gains. In addition, the Initiative will provide incentive for developing new
technologies and creating new markets.
The Initiative promotes trading in four types of effluent reduction:
* Point Source - Nonpoint Source Trading
> Point Source - Point Source Trading
* Nonpoint Source - Nonpoint Source Trading
> Pretreatment Trading
The sections below describe the potential for cost savings to private sources from each
type of trading, based upon an EPA Office of Water analysis of Clean Water Act economic
incentives (EPA, 1993a).
16.1 Point Source - Nonpoint Source Trading
Cost savings from two case studies indicate that the range in savings could be between
$1 million and $12 million per site. EPA's Water Body System has identified about 940 water
bodies that can benefit from nutrient trading. The number could be smaller after future NFS and
pending point source controls are implemented in impaired water bodies. Assuming the actual
number of appropriate sites is half the 940 (i.e., 470), the potential savings overall could range
from $611 million to $5.6 billion.
16.2 Point Source - Point Source
Actual savings from point-point trading will vary from site to site because of differences
between sites: size, water quality needs, availability of technology, number of participants,
program design costs, etc. EPA's Water Body System has identified about 210 water bodies that
can benefit from trading. Data from 12 simulation studies show that the potential savings range
from $40,000 to $9.2 million per site. Potential cost savings could thus be in the range of $8.4
million to $1.9 billion.
16.3 Nonpoint Source - Nonpoint Source
The potential for nonpoint-nonpoint trading exists, but sufficient information is not
available at this time to develop estimates.
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16.4 Pretreatment Trading
Potential savings due to pretreatment trading are based on a case study of one large
POTW (Field's Point in Providence, RI) that has a large number of industrial dischargers,
including 117 metal finishing facilities. Simulation shows that the loading of nickel can be
reduced by 20 percent, at a cost savings of $580,000 (81 percent) from the costs of across-the-
board reduction of 20 percent for all metal finishers. Sixteen industrial dischargers can install
advanced treatment systems, and the POTW could provide removal credits to 97 dischargers,
thus eliminating the need to install additional treatment at these facilities.
The simulation study identified 62 PQTWs as potential candidates for trading. These
POTWs support a large number of industrial dischargers, including a fair number that discharge
a single pollutant. Extrapolation from the Field's Point data suggests that the potential cost
savings is $39 million. Actual savings will depend on the POTW, the type of pollutant(s)
traded, the number of dischargers participating, program design costs, etc. Potential savings
could be larger if additional POTWs could participate.
These potential decreases in costs should not be viewed as future costs avoided (or not
incurred) because dischargers will not be installing additional controls; to meet new requirements.
These potential cost savings should not be viewed as decreasing other costs discussed in this
report but instead would represent reductions in the cost of additional controls needed for growth
or to meet water quality standards.
Total potential savings from all types of trading range from $658 million to $7.5 billion
per year.
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17.0 Monetized Benefits: Urban Areas17
This section presents an estimate of the overall benefits that are likely to result from
adoption of the Initiative's provisions that address urban sources of water pollution, including
CSO, storm water, and toxics.
17.1 Introduction
The nation's lakes, rivers, bays, and oceans are enjoyed for their aesthetic qualities and
for their recreation opportunities (e.g., fishing, waterfowl hunting, swimming, boating, and
viewing). They also support a commercial fishing industry, and surface waters are diverted for
food processing, other industrial uses (e.g., cooling), forestry, animal husbandry, and agriculture
(i.e., irrigation). In addition to supplying these and other current services for humans, the
preservation of some aquatic ecosystems may provide nonuse or passive values. For example,
these values may stem from the desires of the current generation to preserve certain ecosystems
for the uses that future generations may have for them. Furthermore, some individuals believe
that society has a stewardship responsibility even if the human uses for those particular
ecosystems are unknown.
Surface waters have yet another use: as a waste receptacle for discharges from industry
and run-off from both rural and urban areas. In spite of the great assimilative capacity of these
waters, they can be degraded by excessive pollutant loadings to the detriment of the other
beneficial uses to society. This section presents an estimate of the range of economic benefits
that may result from adoption of the Initiative's provisions dealing with urban sources in the
CWA. Due to uncertainties along each step of the process from implementation of the
provisions to the resultant changes in water quality and finally to the effects on human welfare,
the estimate of the economic benefit range may understate or overstate actual benefits.
17.1 Limitations
The analysis of the economic benefits focusing on urban areas draws upon information
provided by a number of disparate data sources, and relies upon a number of assumptions. The
synthesis of information introduces considerable uncertainty into the final numeric values. Major
sources of uncertainty that limit our ability to be confident in the numeric results include: (1)
the actual extent of impaired waters; (2) the method of attributing responsibility for impairment;
(3) our assumptions about the efficacy of the provisions; and (4) the reliance upon secondary
sources of information when estimating the economic values of environmental quality. The
absence of reliable information on all of these elements plays a critical role in our ability to draw
conclusions about the benefits that will result from the Initiative.
trj
See also the EPA (1994h) background paper "Aggregate Economic Benefits for Controlling Selected Urban-
Based Pollution Sources," February 1994.
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One of the more significant points of uncertainty in the analysis relates to the monetary
valuation of economic benefits for the dominant benefit category--the enhanced freshwater
recreation, aesthetics, and non-use benefits that ensue with the proposed water quality
improvements. The absence of alternative data sources constrained us to make use of a
published, yet dated, contingent valuation research study that measured a household's use and
non-use values for national and, by apportionment techniques, more localized improvements in
freshwater rivers and lakes. Criticism has been levied against the validity of empirical results
for non-use values derived using prior contingent valuation research methods. Several issues
raised in the ongoing debate about this valuation method bear directly upon the interpretation of
the numeric results provided by our source materials.
Independent of this debate, further uncertainties are introduced by transferring the
research results to the policies and environmental concerns addressed, by the Initiative. The wide
range of values demonstrates an attempt to capture the impact of these uncertainties on the
numeric estimate. All told, it is difficult to conclude whether the presented numeric ranges
underestimate or overestimate the actual benefits. We suggest that the numerical results best
serve to indicate the overall order-of-magnitude of the benefits. Based upon our experience in
undertaking the analysis, we can further conclude that considerable gaps persist in our ability
to measure and evaluate the relationships between water quality conditions and economic
activities, even twenty years after the passage of the principal legislation designed to identify and
address water pollution problems. The Administration's Initiative contains provisions to help
rectify this situation in the future.
17.3 Methodology and Assumptions
This analysis begins with informed judgement about the extent of water quality
improvement that may result from implementation of CSO and storm sewer provisions relative
to current conditions. We assume that in all cases where CSOs or storm sewers are thought to
be the leading source of impaired urban waters (i.e., based upon the 305(b) Reports), the
implementation of these provisions will restore these waters to fishable and swimmable quality.
Furthermore, for those waters where other sources must share significant responsibility with
CSOs and storm sewers for precluding the attainment of fishable and swimmable quality, we
assume two things. First, we attribute 50% of the responsibility to CSOs and storm sewers.
Second, we assume that the implementation of other provisions of the act in combination with
the CSO and storm sewer provisions will result in the attainment of fishable and swimmable
quality in the affected waters. Thus, although we recognize that uncertainty about the actual
extent of impaired waters may lead to an over or underestimate of the economic benefit range,
our method of attributing responsibility for impairments and our assumptions about the efficacy
of the provisions may tend to overestimate the economic benefit range.
Beyond the physical, chemical, and biological changes that may result from the CSO and
storm sewer provisions, for the economic evaluation it is also necessary to estimate the effects
these changes have on humans and other economic entities (i.e., industry). For the purposes of
this assessment we aggregate these sources of benefits into four primary categories: 1. enhanced
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freshwater recreation, aesthetics, and nonuse benefits; 2. enhanced marine recreation, aesthetic,
and nonuse benefits; 3. cost savings or increased output for withdrawal or diversionary users;
and, 4. cost savings or increased output for commercial fisheries. In the event that human health
effects were not subsumed in the benefit estimates of one or more of the four primary categories
we include it as a fifth category. In addition to quantifying an economic benefit range for each
of these categories, we mention the other potential changes in the economic activities of
consumers and producers that could not be quantified.
The existing economic literature on the benefits of water quality improvements suggests
that enhanced water-based recreation and aesthetics and the non-use values that people may hold
for the preservation of the nation's aquatic ecosystems is the largest source of quantifiable
economic benefits. The sheer numbers of people who recreate in a water setting each year
testifies to the importance of this resource. More to the point, a growing number of economic
studies are documenting the influence that water quality characteristics have on which water
bodies people choose to visit, how often they engage in water-based recreation activities, and
how much they are willing to pay for incremental improvements in water quality. Less abundant
are the studies that demonstrate the linkage between water quality improvements and the
resultant increases in individuals' non-use values, but there is general agreement that these values
exist. This is based in part upon survey responses from people who do not currently use the
nation's surface waters for recreation or for their aesthetics but nonetheless indicate a willingness
to pay for achieving certain water quality standards.
There are no primary studies that attempt to estimate the enhanced recreation, aesthetics,
and non-use benefits of water quality improvements that may be attributed to the CSO and storm
sewer provisions of the Initiative. However, there is a study that attempts to ascertain the total
economic value that households place on the achievement of incremental improvements in
virtually all of the nation's lakes, rivers, and streams (i.e., marine waters were not included)
(Mitchell and Carson, 1984, 1986; Carson and Mitchell, 1993; and Lyon and Farrow, 1992).
As a part of this research effort, a method of allocating the household's willingness to pay for
improvements in local water quality was also devised. This method of apportioning total
willingness to pay for subnational changes in water quality was "validated" by comparing the
resultant estimates with those of studies that valued similar incremental improvements (i.e., from
beatable to fishable and from fishable to swimmable) at the local level (Mitchell and Carson,
1986; Carson and Mitchell, 1993). Therefore, we use Mitchell and Carson's research to
suggest the range in enhanced recreation, aesthetics and non-use benefits from improvements in
urban freshwaters that may result from the Initiative. Key assumptions in this analysis involve:
the number of households proximate to the improved waters versus all other households, the
proportion of improved waters in the household's State relative to all of the State's degraded
waters, the abundance of clean alternatives proximate to the household, the abundance of
substitute clean waters in the state, and the accuracy of the original study. Uncertainty about
each of these factors leads to a wide range for the economic benefit estimate. Moreover, to say
whether the range itself underestimates or overestimates the actual benefits is impossible,
especially when uncertainties about the actual physical water quality changes are factored into
the analysis.
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The remaining quantifiable economic benefits (i.e., enhanced marine recreation,
aesthetics, and non-use values; commercial fishing; water diversions; and human health) are
small by comparison with the freshwater benefits. In addition, the economic basis for estimating
these benefits is less defensible. We rely entirely upon secondary studies to suggest a plausible
range of benefits for these categories. Finally, we mention briefly other possible economic
benefits to people and economic entities that may or may not be subsumed in the foregoing
analyses. We believe that mentioning these potential economic effects is important because we
cannot rule them out on the basis of current knowledge. A more detailed discussion of how the
benefits are quantified and monetized is included in Appendix D.
17.4 Summary of Benefits Results
Monetized Benefits: Urban Areas. EPA estimates further that the aggregate benefits
of pollution control in urban areas will eventually produce quantifiable benefits of between $0.8
billion and $6.0 billion per year (Table 18). The range recognizes the uncertainty associated
with these estimates. For example, the upper end of the range may be an underestimate in the
extreme case where the new provisions are 100 percent effective, households care very much
about the resultant improvements relative to the other waters in their sitate, and the unqualified
benefits turn out to be significant relative to the quantified benefits. Similarly, the lower end
of the range may be an overestimate in the extreme event that the new provisions fail to improve
water quality to fishable and swimmable levels, or the changes in water quality have no effect
on the economic activities of consumers and producers.
Quantified Benefit Categories. The first beneficial category relates to the total value
that households place on the enhanced recreation, aesthetics, and non-use values associated with
improved urban freshwaters. The most comprehensive assessment of such benefits is actually
too inclusive. A contingent valuation study conducted by Mitchell and Carson (1984, 1986), and
updated by Carson and Mitchell (1991, 1993) values freshwater quality improvements beyond
the expanse of waters whose quality will be improved as a consequence of the urban provisions
of the Initiative. However, Mitchell and Carson (1986) show how their research results can be
used to value localized improvements such as may occur once the CSO, storm water, and other
urban-based provisions are implemented. According to Mitchell and Carson (1986), respondents
to their survey were willing to allocate 67% of their national willingness to pay to achieve
improvements at the state level. Then, Mitchell and Carson (1986) devised guidelines for
further reducing this percentage for sub-state water quality improvements.
To implement their strategy, we divided the population into two types of people; those
living in urban areas proximate to the water quality change, and all other households. The
allocation of households into these two groups was based upon an estimate of the number of
households living in urban areas proximate to waters that have not attained fishable and
swimmable conditions. The simulations from a water quality model that linked urban
populations to waters in EPA's Reach File 1 (Bondelid and Cooter, 1994) provided an estimate
of the urban populations that are proximate to impaired waters. By "proximate" is meant living
in a city or town that has the same reach designation as the river segment. The 305(b) reports
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provided the estimate of the percentage of impaired urban waters that are due, at least in part,
to CSOs, storm water, and other urban-based pollution. Both estimates were based upon
nonrandom samples of their respective populations, and yet we used these estimates to
extrapolate to the full national populations of households and freshwaters. Unfortunately, we
do not know whether the effect of this extrapolation is to under- or over- estimate the number
of households that are most proximate to improved waters.
The households living proximate to improved urban waters are likely to benefit most
from the successful implementation of the urban provisions in the Initiative. We assign them
a range of benefits using Mitchell and Carson's lower bound of 12% and upper bound of 67%
of their total willingness to pay. The high end of the range is only appropriate if the improved
waters represent virtually all of the previously degraded waters in the household's state and/or
the households care most about their state waters they adjoin. Households not located along
these improved waters are assigned a lower bound of 0% and an upper bound of 12%, as the
improved waters are located further away and substitution possibilities are relatively abundant.
For both types of households, the estimates are further reduced by 50% in cases where other
sources of pollutants besides CSOs and storm water are assumed to be limiting factors that may
preclude fishable and swimmable water quality conditions.
The number of urban households expected to directly benefit from improvements in their
local waters are considerable. We estimate that 29 million urban households border waters
currently incapable of supporting suitable fishing conditions, and 41 million households adjoin
water that fail to meet criteria used to classify swimmable designated use conditions. Of these
households, nearly 4 out of every 10 are expected to experience a full recovery of their waters
to support these designated uses as a consequence of implementing the urban-based Initiative
provisions. The remainder may see partial or no improvement because additional measures will
be required to bring the affected waters to fishable and swimmable conditions, measures that are
presently mandated under existing environmental statutes but have yet to be fully implemented.
The annual economic benefits to the first group of households expecting full recovery of
their waters ranges from $0.4 to $2.0 billion. For households in those urban areas where these
provisions will serve to eliminate some of the problems, when the remaining limiting factors are
overcome, their benefits are expected to range between $0.3 to $1.6 billion. Lastly, the range
of benefits to persons outside of these affected areas but expected to enjoy use or non-use
benefits as a result of improvements in these areas is zero to $1.1 billion. Adding these three
categories of households, the consequences of bringing these urban area waters into designated
fishable and swimmable water quality conditions yields a national total annual benefit estimate
between $650 million and $4.7 billion. As can be seen, the majority of the monetary benefits
are associated with those urban households that are located in areas having water quality
problems.
The wide range in estimated benefits reflects, in part, the uncertainties in the analysis
regarding the strength of these households' preferences for achieving improvements in their local
impaired waters. Their values should be dependent upon the availability of possible substitutes,
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which is a function of the scope and magnitude of the severity of water quality problems present
in the state from both urban and other pollution sources. The statistics provided by the draft
1992 305(b) report (EPA, 1993b), identify urban runoff and storm water as a leading source of
impairment in 24,100 assessed river miles (30% of non-agricultural impaired and assessed miles,
or 10% of all impaired and assessed miles, or 3% of all assessed miles, or 0.7% of all river
miles in the nation). Similarly, for lakes, reservoirs, and ponds, urban runoff and storm water
are leading sources of impairment in 1.31 million acres (52% of non-agricultural impaired and
assessed acres, or 24.1% of impaired and assessed acres, or 7.1% of all assessed acreage, or
4.8% of all lake acreage in the nation). These types of statistics could be used to attempt to
locate where along the range of values expressed in the Mitchell and Carson research, these
specific urban provisions would be expected to fulfill. The 305(b) data provided on mileage and
acreage of freshwater that was assessed and found to be impaired by urban-based sources of
pollution does not, absent further assumptions or additional information, permit us to select a
narrower range of values to assign to households. Still, we believe that the 305(b) data suggests
that the calculated upper end of the range constitutes a very optimistic (i.e., high) estimate of
the quantified benefits in this category.
The marine recreational fishing category captures the anticipated economic benefits to
persons who now participate or would likely participate in marine sportfishing and shellfishing
activities in the event water quality improvements would result from controls placed on urban
sources identified in the Initiative. The range of estimated economic benefits is due to the
uncertain relationship between water quality changes, reductions in urban pollution sources, and
the expected economic value of achieving water quality improvements. Unlike the freshwater
recreation benefits, these estimates do not include possible non-use values households may hold
for improvements in these areas. At present, an estimated 92 million marine recreational trips
are taken every year. As a result of water quality improvements due to the Initiative, these
numbers are expected to increase by 10 percent to 20 percent above current rates. Using these
increases, in combination with estimates on the economic benefits associated with each trip, we
estimate that the anticipated annual economic benefits to marine recreational fishing from the
urban-based provisions will be between $40 million and $440 million. The literature does not
support including other consumptive recreation activities despite evidence of the influence of
water quality parameters on swimming and boating in coastal waters. National estimates of
marine recreation participation rates are not available currently for these activities, and it is not
known how water pollution controls have improved water quality and influenced recreation
behavior. Finally, the literature on nonuse values associated with nondegraded or improved
marine water quality is almost nonexistent, with the exception of lost nonuse values due to oil
spills.
The marine nonconsumptive recreation benefit category consists of recreational activity
other than fishing and swimming that occurs within estuaries or along the coast. Current
participation rates and estimates of the economic benefits associated with viewing of wildlife are
used as a foundation for the benefits of attaining further water quality improvements. The range
in benefits is the result of the same uncertainties described in the marine recreation fishing
discussion above. Also, non-use values to households for water quality improvements affecting
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these activities are not included in the estimates. Recent surveys of recreational activity indicate
that nearly 7 million persons engage in oceanside viewing of wildlife, and an estimated 5.6
million persons visit wetlands and marshes to observe wildlife. Water quality improvements due
to the Initiative's provisions are expected to increase participation in these activities by 10
percent to 20 percent above current rates. The estimated number of trips per person and
economic benefits per trip are used to calculate the potential benefits to nonconsumptive
recreation activity from water quality improvements associated with the urban-based provisions.
The range of annual benefits is estimated at between $30 million and $300 million.
The estimated benefits to marine and freshwater commercial fisheries from anticipated
improvements in water quality conditions are based upon information about current commercial
activity. The potential gains from reducing urban source loadings of pollution are assumed to
be a function of current benefits associated with existing water quality conditions and the
estimated contribution these urban sources make to overall water quality limitations. The
estimated values capture benefits to both commercial producers and households resulting from
expected increases in stocks offish and shellfish and other efficiency gains to commercial fishing
operations. The current ex-vessel value of coastal fisheries is approximately'$1.8 billion per
year. Water quality improvements due to the Initiative are expected to increase baseline
economic values associated with these activities by 10 to 20 percent above current rates. Given
the expected contribution of changes in urban-based pollution loadings to these improvements,
the total range of economic benefits to commercial fisheries is estimated between $40 million
and $190 million. These figures include benefits to the commercial industry and consumers of
seafood from an expected increase in the quantity and quality of harvested seafood.18 We
should note that a recent review of studies that demonstrate linkages between fish populations
and water quality was conducted by Strand (1993). He found only two studies that demonstrated
credible relationships between pollution and fish populations for some species in a few coastal
locations. The paucity of analysis may be due to a lack of trend data on pollution and fish
populations or, alternatively, because the effects are not generally present. The study submits
that the infrastructure for assessing the incremental benefits of implementing existing or new
policies is not present, and recommends collecting the data and doing the analysis in order to
guide spending on water pollution control to the areas where it will have an effect. Such an
investment in research may be necessary to protect the billion-dollar fishing industry, while
avoiding wasting resources on programs that do not work.
Improvements in urban water quality are expected to result in reduced costs to
commercial, industrial, and municipal consumers who use these waters as an input to production
of goods and services, including drinking water. For example, improved surface water that is
diverted to the public water supply results in cost savings for treating drinking water. In the
manufacturing sector, the cooling and processing costs in the food and beverages, textiles, paper,
chemicals, and steel industries are somewhat reduced by higher quality intake water. For
The health benefits of uncontaminated seafood is included in the health benefit estimates. Consumers benefit
in this category as a result of the lower prices or the greater supply of seafood.
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thermoelectric energy production, treated water is used for reactor and condenser cooling to
reduce corrosion, particularly in cases where cooling water is recalculated. The treatment costs
may be reduced by higher quality intake water. The influence of urban source controls on
withdrawal or diversionary uses is not expected to be substantial, due to the presence of other
limiting factors associated with these waters (e.g., naturally occurring elements) but some
marginal cost savings may occur. In this analysis, only manufacturing and drinking water
suppliers are included in the quantitative estimates. Estimates of the current costs of water
treatment, or damages caused by poor water quality, serve as the baseline measure of potential
benefits Current conditions are expected to improve after having reduced urban-based pollution
discharges identified in the Initiative. The overall level of improvements reflected in costs
savings to some industries and manufacturing facilities is expected to be fairly low, probably no
more than 1 to 5 percent of current costs. As a result, the expected annual economic benefits
to diversionary uses of water will fall between $20 million and $80 million.
The ability to provide greater opportunities to swim and fish in the nation's waters also
provides for the reduction from acute and chronic risks posed by chemicals and bacteria
discharged from urban-based pollution sources. The human health benefits of reduced exposure
to these types of compounds are calculated, using information on changes in the expected
number of persons exposed to a subset of pollutants originating with urban dischargers. As a
consequence of controls, the number of beach closures and advisories will be expected to
decline • and participation will rise. Current participation rates in freshwater and marine
swimming are estimated at 450 million person-days per year. Of these, between two and four
million acute illnesses are expected to result from current exposures to pathogens. Given
information on the duration and costs associated with these types of illnesses, the expected
reductions in risks from the urban-based Initiative provisions will result in annual economic
benefits of $30 million to $100 million. Risks from the consumption of contaminated seafood
are also expected to diminish as a consequence of reducing urban-based pollution sources. In
particular, risks to those persons that partake in greater than average consumption rates ot
seafood (e g., subsistence fishingpersons) will be reduced. The expected reduction in cases of
chronic illnesses attributed to consumption of contaminated seafood, and the value of reducing
these types of risks, results in an estimated range of benefits between $40 million and $220
million. Adding these two separate estimates together yields a total health benefit range of $40
million to $320 million.
Unqualified Benefit Categories. There are a number of benefit categories that are
known to be affected by water quality conditions, and hence are likely to be affected by the
adoption of the urban-based provisions in the Initiative. However, the absence of information
limits the capability to produce monetary estimates for these categories. Rather than completely
omit them from the discussion, we have elected to briefly discuss some of the more significant
categories so as to enable the policies to be evaluated with as much information as feasible,
whether it be quantitative or qualitative in nature.
The impacts of the provisions on marine recreation swimming are not fully captured in
the above section on quantitative impacts. Some of the human health benefits are considered,
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but the non-health benefits from the provision of more and higher quality marine recreation
opportunities have not been included. In addition to the selected acute and chronic effects of a
few of the many pollutants that will be addressed by the Initiative provisions, there are many
other hpman health effects that have not been quantified. Potential effects on reproductive
systems and several other acute and chronic effects from pollutants discharged from urban
sources were excluded from the quantitative measures. Recreational hunting activities are likely
to benefit from the provision of a greater number and higher quality habitat necessary to support
different forms of wildlife. The availability of living space, supply of food sources and impacts
on reproduction have been associated with environmental pollutants. Reductions of pollutants
that limit the ability of natural systems to support wildlife will result in economic benefits to
hunters and other persons interested in nonconsumptive recreation activity occurring on or near
freshwater. Although most of the nation's waters are thought to support boating activity it is
plausible that further improvements in both freshwater and marine water quality conditions will
enhance the enjoyment of recreational boating, and thus may have positive economic value to
persons engaged in these activities. These are thought the constitute some of the more
significant benefit categories, as measured by current participation rates or level of economic
activity.
In addition to measuring the benefits to parties that make direct use of resources
supported by cleaner marine and freshwater, there is another economic value individuals may
hold for environmental protection that does not rely on the use of the amenity in question
Individuals can express a willingness to pay for the protection of environmental conditions
absent any personal desire to participate in the above activities supported by these conditions'
In the freshwater fishing and swimming benefit estimates, we were able to include the non-user
Benefits in the range of estimates because of the type of source material used in the valuation
step for this part of the analysis. For the remaining benefit categories, the nonuse value
component, if positive, has been omitted. Studies on nonuse values have documented substantial
economic values for some types of environmental goods. The lack of reliable information on
these other categories prevents the inclusion of these values in the quantitative estimates.
The ability to support better functioning natural systems may provide a way to substitute
for currently operated and maintained manmade systems. For example, natural systems can help
provide flood control services, water storage, and purification processes, and reduce the need
for dredging of disposed sediment. The potential avoided costs from improvements in water
quality can be significant. Estimates for some of these avoided costs have been captured in parts
of the cost analysis for the Initiative's provisions (e.g., agricultural practices).
A final category of unqualified benefits not listed in the table concerns the potential
enhancements in overall economic productivity and effirimny that may be gained as a
consequence of improving the quality of the nation's waters. In some cases, underutilized
economic resources devoted to the protection of the environment can lead to greater levels of
overall production and social welfare than if these resources were to remain underemployed
Most often, these types of benefits are treated as secondary benefits, and are not expected to
contribute to net improvements to overall economic activity measures. In general this is
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probably true, but it is possible that for some specific local areas, shifting of economic resources
into the protection of the environment may yield positive net economic benefits. However, were
we to include this information in the analysis, we would need to introduce other indirect costs
not fully captured in the description of economic costs estimated to result from these provisions.
Failure to develop a fully balanced description of costs and benefits could distort comparisons
between the two categories. As the cost analysis was not developed along these lines, a
reference to potential indirect benefits is omitted in Table 18.
Costs- Urban Areas. Provisions in the Initiative that address urban areas are loosely
defined to include storm water Phase I and Phase II, CSOs and toxics controls. The annualized
costs of these provisions for all sectors is estimated to be between $9.9 and $13.9 billion, as
shown in Table 17.
Net Benefits: Urban Areas. The monetized benefits of the Initiative ($0.8 billion to
$6.0 billion), assuming benefits are realized immediately, contrast with between $9.9 billion to
$13.9 billion in incremental annualized costs for urban areas.
However, benefits are unlikely to be realized immediately. To illustrate how the gradual
attainment of the benefits may influence the benefit-cost comparison, the figures in Tables 17
and 18 show the annualized monetary costs and benefits from control of urban sources under
proposed and pending spending. In Table 18, two of the three aggregate benefit estimates
provide for the gradual attainment of benefits, applying different discount rates to an assumed
future stream of benefits. The selection of the two discount rates reflects Administration
guidelines on the application of discounting to costs and benefits (seven percent), as compared
with the use of a social rate of time preference (three percent). The discounted annualized
benefits are some twenty to thirty percent lower than the annualized benefit estimate that fails
to account for the expected delays in achieving tangible water quality improvements. This
serves to demonstrate the sensitivity of the results to both the time and discounting features of
the analysis.
Comparing the annualized costs and benefits under any of the three annualized benefit
estimation scenarios, it is apparent that the range of estimated monetary costs and benefits do
not presently overlap. Despite information of this type, the Administration feels it is important
to proceed with the Initiative for several reasons. As stated throughout the text, and documented
in the supplemental materials, there are great uncertainties associated with both the cost and
benefit estimates that are not captured in the presentation of the numerical results. For example,
although the national cost estimates have attempted to account for targeting of watersheds in
need of improvement and emphasized prevention measures over comrnand-and-control strategies,
there are uncertainties in the analysis because of the difficulty of fully accounting for the
consequences of providing flexibility in the identification of problems and solutions. There are
also a number of tangible benefits for which monetary estimates have not been developed. So
as to better inform decisionmakers and the public in the future EPA is proposing a comprehen-
sive benefit-cost study of the pollution controls in the CWA reauthorization. This study will
reduce the uncertainties surrounding the benefits and cost estimates.
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Despite the uncertainties, an important contribution of the economic analysis has been
its ability to document the significant savings the Initiative is proposing compared with the
requirements called for in the existing legislation. In addition, considerable effort was given to
developing cost-effective policies where new efforts are needed to achieve the goals of the Clean
Water Act. Therefore, the Initiative demonstrates a genuine effort to achieve cost-effective
regulatory management approaches to improving the nation's polluted waters Equally
important, the public's right to enjoy clean waters, and the demonstration of their preferences
through environmentally protective federal legislation, have served as inputs into the
development of Administration policy. Strong public support for additional pollution control
programs persists, and the Initiative will address what the Administration believes are the most
significant remaining problems.
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REFERENCES
Bondelid, T. and W.S. Cooler. 1994. "A Tool for Evaluating the Effectiveness of the Clean
Water Act." Research Triangle Institute Project No. 35U-5726-3, Center for Environmental
Analysis, Research Triangle Institute, P.O. Box 12194, Research Triangle Park, NC 27709.
Carson, R.T. and R.C. Mitchell. 1991. "The Value of Clean Water: The Public's Willingness
to Pay for Boatable, Fishable, and Swimmable Quality Water." Economics Department,
University of California, San Diego.
Carson, R.T. and R.C. Mitchell. 1993. "The Value of Clean Water: The Public's Willingness
to Pay for Boatable, Fishable, and Swimmable Quality Water." Water Resources Research 29(7):
2445-2454.
DOD. 1993a. "Clean Water Act Reauthorization 'Initiative' Resource Requirements."
Memorandum from Michael L. Davis, U.S. Department of Defense, Department of the Army,
Office of the Assistant Secretary of Army (Civil Works), to the EPA Office of Water.
November 19, 1993.
DOD. 1993b. "Federal Agency Costing of the Administration Initiative." Memorandum from
Josephine S. Huang, U.S. Department of Defense, Office of the Undersecretary of Defense, to
EPA Office of Water. November 17, 1993.
DOE. 1993. "S. 1114 Federal Agency Cost Estimates." Memorandum from David Moses to
Mark Luttner, EPA Office of Water. September 13, 1993.
DOI. 1994. "Incremental Impacts of S. 1114 and the EPA Initiative for the Department of the
Interior." Memorandum from Gregory E. Schwartz, U. S. Department of the Interior,
Geological Survey, to Mahesh Podar, EPA Office of Water. January 27, 1994.
EPA 1990a. "National Water Quality Inventory: 1988 Report to Congress." EPA Office of
Water. 1990.
EPA. 1990b. "Environmental Investments: The Cost of a Clean Environment." EPA-230-11-90-
283. EPA Office of Policy, Planning and Evaluation. November 1990.
EPA. 1992. "National Water Quality Inventory: 1990 Report to Congress." EPA 503/9-
92/006. EPA Office of Water. April 1992.
EPA. 1993. "Draft Combined Sewer Overflow Control Policy." EPA Office of Water.
EPA. 1993a. "Economic Incentives in the Clean Water Act: Some Preliminary Results."
Presented by Mahesh Podar and Mark Luttner, EPA Office of Water, at the 86th Annual
Meeting of the Air & Waste Management Association, Denver, CO. June 13-18, 1993.
59
-------
EPA. 19935. "National Water Quality Inventory: 1992 Report to Congress. "Draft report. EPA
Office of Water. July 1993.
EPA. 1993c. "Review of Program Costs in Part 2 NPDES Municipal Storm Water Permit
Applications." Draft report. EPA Office of Water. August, 1993.
EPA. 1993d. "Report to Congress on Storm Water Dischargers Not Regulated Under Phase I
of the NPDES Storm Water Program." Draft report. November, 1993.
EPA. 1993e. "Guidance Specifying Management Measures for Sources of Nonpoint Pollution
in Coastal Waters." 840-B-92-002. EPA Office of Water. January 1993.
EPA. 1993f. "State Program Costs for Implementing the Federal Clean Water Act " EPA
Office of Water. December 6, 1993.
EPA. 1994. "CWA Benefits of Nonpoint Source Controls." EPA background paper. January
EPA. 1994a. "Costs and Benefits Related to Groundwater Provisions of the Green Book. " EPA
Office of Water background paper. January 1994.
EPA. 1994b. "CWA Benefits of Mitigation of Inactive and Abandoned Mines on Federal
Lands." EPA background paper. January 1994.
EPA. 1994c. "Detailed Cost Estimates for Storm Water." EPA Office of Water. January
1994.
EPA. 1994d. "Summary of CSO Costs and Benefits of Various CSO Controls " EPA Office
of Water. January 18, 1994.
EPA. 1994e. "CWA Benefits of Storm Water Controls." EPA background paper January
1994. 3
EPA. 1994f. "CWA Benefits of Toxic Controls." EPA Office of Watr background paper
January 1994.
EPA. 1994g. "CWA Benefits of a Watershed Protection Approach." EPA Office of Water
background paper. January 1994.
EPA. 1994h. "Aggregate Economic Benefits for Controlling Selected Urban-Based Pollution
Sources." February 1994.
ERG. 1993. "Documentation of Costs of NPS Control Under Reauthorized CWA."
Memorandum from Jeff Cantin, ERG, to Mark Luttner, EPA Office of Water. December 22,
60
-------
1993.
16, 1993. (206-649-7180).
Lyon R and S. Farrow. 1992. "An Economic Analysis of Clean Water Act Issues: Preliminary
Results." Office of Management and Budget. February 1992.
Metcalf & Eddy. 1993. " 1992 CSO Needs Survey: Technical Report on the Estimation of CSO
Needs." Draft report. September 29, 1993.
Mitchell R C and R.T. Carson. 1984. "Willingness to Pay for National Freshwater Quality
Improvements." CR 810224-01. EPA, Washington, D. C.
Mitchell RC and R.T. Carson. 1986. "The Use of Contingent Valuation Data for Benefit/Cost
* in Water Pollution Control." CR 810224-02. EPA, Washington, D. C.
Nicoll, D. 1994. Personal communication between Debra Nicoll, Office Water, and Jeff Cantin,
ERG. January 1994.
NOAA 1993. Personal communication between Bess Gillelan, US .Department «f Commerce
National Oceanographic and Atmospheric Administration, and Jim Pendergast, EPA Office of
Water. November 15, 1993.
Phillips et al 1993. "The Effects of Alternative Pulping and Bleaching Processes on Product
Performance' Economic and Environmental Concerns." In Prom»dWs: International
nn pST^ntion in the Manufacture, of Pulp and Paper - Opportunities and
m nn ,
ITust 180, 1992. EPA-744R-93-002,. EPA Office of Pollution Prevention and
Toxics. February 1993.
r Bailly 1992. "Regulatory Impact Analysis: Management Measures Guidance for
^toS. in Coastal Watershed Areas." Prepared for the Nonpomt Source
Control Branch, EPA/OW/OWOW. December 28, 1992.
Strand I 1993 "The Contribution of Clean Water to Commercial Fisheries." In Proceedings
!S^n w^nd ft- *™— " *™n«mv Conference. EPA 800-R-93-001a. Washington, D.
C.
USDA 1994 "Impacts of Selected Clean Water Provisions on the Agricultural Sector. "Letter
fromtohn Stierna, U.S. Department of Agriculture, Soil Conservation Service, toMarkLuttner,
EPA Office of Water. January 24, 1994.
61
-------
-------
Table 1
Classification of Nonpoint Source Sectors
NFS Sector
Agriculture
Forestry
Urban areas
Hydromodification
Marinas
Wetlands, riparian areas, and
vegetated treatment systems
Soil erosion from cultivated cropland
Annual grazing, espcially in streamside areas
Management of nutrient applications
Control of irrigation flows
Animal waste management
Pre-harvest planning
Streamside management areas
Forest road construction/reconstruction
Timber harvesting
Site preparation and forest regeneration
Fire management
Revegetation of disturbed areas
Management of forest chemical use
Management of forest wetland areas
Construction site runoff
Developing areas runoff
Existing; development runoff
On-site sewage disposal systems
Road/highway/bridge runoff
Household/commercial/landscaping waste disposal
Channelization and channel modification
Dam construction and maintenance
Shore erosion
Marina siting and design
Operation and maintenance practices
Protection of wetlands and riparian areas
Restoration of wetlands and riparian areas
Use of constructed wetlands, filter strips, buffer strips
ures for Sources of Nonpoint
of Water, January 1993.
-------
g
-------
Table 3
Descriptive Statistics of the Coastal and Noncoastal Z-one
Statistic
=
Counties (1990)
• •—
Population (1990)
. •
Land area - sq. mi.
(1990)
——
Surface water area
sq. mi. (1990)
Farms (1987)
_
Farm land - acres
(1987)
Total U.S.
3,130
^_^—^—^—^—
246,750,237
3,521,131
241,151
2,081,085
__————
958,775,957
Coastal Zone
==
678
^~~^—
127,351,147
•
635,166
_ ~~
122,402
Noncoastal
Zone
2,452
119,399,090
2,885,965
118,749
405,844 I 1,675,241
98,677,897 I 860,098,060
Noncoastal
Zone as
Percent of
Total
Source: U.S. Department of Commerce, Bureau of the Census, USA Coupes (CD-ROM).
-------
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Table 12
Summary of Likelihood That Full Implementation of NPS Management Measures Will
Measurably Improve National Water Quality1 - Rivei
Likelihood of Achieving Measurable Water Quality Improvement
in 10 to 20 Years (Miles)
1 Projected for 54 states and territories based on WBS analysis.
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-------
Table 14
Summary of Likelihood That Full Implementation of NFS Management Measures Will
Measurably Improve National Water Quality1 - Lakes
Use Support Status
Fully Supporting but
Threatened
Partially Supporting
Not Supporting
TOTAL
Likelihood of Achieving Measurable Water Quality Improvement
in 10 to 20 Years (Acres)
High
1,026,355
0
0
1,026,355
Medium
1,288,996
4,799,150
13,736
6,101,882
Low
0
1,447,097
1,588,298
3,035,395
1 Projected for 54 states and territories based on WBS analysis.
-------
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-------
Table 17
Summary of Aggregate Annualized Costs from Control of Urban Sources Under the
Initiative and Pending Spending (CSOs, Storm Water, Toxics)
Cost Category
Municipal Costs
Phase I Storm water
Phase II Storm water
CSO Controls
CZARA Non-Point Controls
Pending Spending (Great Lakes,
Sludge)
Subtotal Municipal
Private Sector
Phase I Storm water
Phase II Storm water
Pollution Prevention Plans
Domestic Sewage Exclusion
Nonpoint Source Controls
Subtotal Private Sector
Total Quantified Costs in Urban Areas
Range:: Low - High
(Millions of 1993 $)
$ 1,650 - $ 2,555
$ 1,030- $ 1,910
$ 3,450
$ 390 - $ 590
$90
$ 6,610 - $ 8,595
$2,360- $2,850
$ 345 - $ 1,670
$ 60 - $ 120
$280
$ 233 - $ 388
$ 3,278 - $ 5,308
$ 9,888 - $ 13,903
Non-Quantified Costs
State Administration Costs (Urban portion of $650m)
Federal Compliance (Urban portion of $945m) - excludes abandoned mines.
Groundwater Controls (Urban portion of $150m to $600m)
Further Water Quality Criteria and Standards and sediment criteria
Toxics Bans
Other Pending Spending (e.g., Great Lakes, Pulp and Paper Effluent Guidelines, Air
MACT standards)
Source: Summary of Tables 19 and 20
-------
Table 18
Summary of Aggregate Annualized Benefits from Control of Urban Sources Under the
Initiative and Pending Spending (CSOs, Storm Water, Toxics)
Benefit Category
Quantified Benefits
Range: Low - High
(Millions of 1993 $)
Freshwater Recreational Fishing and Swimming (use and nonuse)
Marine Recreational Fishing (use only)
Marine Nonconsumptive Recreation (use only)
Marine and Freshwater Commercial Fishing
Withdrawal or Diversionary Uses
Human Health Effects (from risks associated with exposure to pollutants via
1 swimming activity and seafood consumption)1
1 Sub-total: Quantified Benefits2
I Assuming immediate attainment of benefits3
(i) Annualized Benefits (no lag and no discounting, thus a
simple summation of individual categories)
Assuming a gradual attainment of benefits over the first 15 year period that
all Urban Source Controls are adopted.*
; (ii) Annualized Benefits (seven percent discount rate, gradual
attainment over first 15 years)
(iii) Annualized benefits (three percent discount rate, gradual
attainment over first 15 years)
$ 650 - $ 4,670
$ 40 - $ 440
$ 30 - $ 300
$ 40 - $ 190
$ 20 - $ 80
$ 40 - $ 320
(i) $ 820 - $ 6,000
(ii) $560 -$4,100
(iii) $ 660 - $ 4,900
Non-Quantified Benefits
- Marine Recreational Swimming (nonhealth effects)
- Other Human Health Effects in Marine and Freshwaters (see Note 1)
- Recreational Hunting- Freshwater Nonconsumptive Recreation (see Note 1)
- Marine Recreational Boating
- Other Non-use Benefits (Marine Waters - see Note 1)
- Other avoided costs (e.g., water storage, dredging, damages from floods).
- Restoration of biodiversity and ecosystem integrity.
Given information and methods used to calculate the quantified benefits, some portion of the benefits associati
with these categories may be captured in the monetary range ascribed to freshwater recreation fishing and
swimming.
2 Assumes no double counting of benefits or substitution effects between different categories when developing
aggregate national estimates. Also assumes that all upper ends of the range for each quantified category describe
the aggregate lower and upper bound estimate. Absent information on the distribution or probability of attaining
benefits defined by the estimated range, we can not calculate a "most likely" estimate.
3 Assuming no lag between implementation of controls, recovery of natural ecological systems, and economic
behavior that forms the basis for the economic benefit measures.
4 These estimates of the economic benefits are more appropriate to use when comparing quantified costs and
benefits, given the anticipated lag time between introduction of the control measures and full realization of the
environmental and economic benefits. The calculated annualized figure is based on assuming a gradual attainment
of benefits up through year fifteen, and a constant future benefits stream after the fifteenth year has been reached.
-------
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