Improving Water Quality: Controlling Point and Nonpoint Sources Chapter 15 © 2004 Thomson Learning/South-Western

2 Controlling Point Sources: Effluent Limitations Overview of the Effluent Limits and National Permits  Effluent Limitations – instituted through the Federal Water pollution Act (FWPCA) of 1972 Technology-based effluent limitations – standards to control discharges from point sources based primarily on technological capability Direct industrial discharges – release their wastes into surface waters without any intermediary  Permit System National Pollutant Discharge Elimination System (NPDES) – a federally mandated permit system used to control effluent releases from direct industrial discharges and POTWs

3 Controlling Point Sources: Effluent Limitations Technology-Based Effluent Limitations for Direct Industrial Dischargers  Effluent limitations are more accurately termed performance based standards  Standards are source dependent New source – one whose construction begun after proposed regulations had been announced Existing source – one whose construction begun before proposed regulations had been announced

4 Analysis of Effluent Limitations on Point Sources Administrative Delays  Over the past 25 years, the EPA’s track record has been slow in developing and revising effluent guidelines, which are the basis for the federal limitations

5 Analysis of Effluent Limitations on Point Sources Imprecise and Inconsistent Definitions  Fundamental problem with effluent limitations is that they are not aligned with the nation’s objectives  Water quality-related limitations – modified effluent limits to be met if the desired water quality level is not being achieved even if polluters are satisfying the technology-based limits

6 Analysis of Effluent Limitations on Point Sources Meeting the Zero Discharge Goal  Overly ambitious  Inefficient objective

7 Analysis of Effluent Limitations on Point Sources Absence of Economic Decision Rules  Lack of an Efficiency Criterion Provisions offer no guidance as to how they are to be used in decision making Lack of precision in the reference to benefits and costs  Cost-Ineffective Decision Making Under the Clean Water Act, the uniformity of the effluent limits prevents a cost-effective outcome Lack of a reward system for efficient abaters to reduce effluents beyond legal limits

8 Waste Treatment Management and the Potw Program The Pre-1987 Federal Grant Program  Federal grant program – provided major funding from the federal government for a share of the construction costs of POTWs

9 Waste Treatment Management and the Potw Program Shift to the State Revolving Fund (SRF) Program in 1987  State Revolving Fund (SRF) program – establishes state lending programs to support POTW construction and other projects

10 Analysis of the POTW Funding Program Assessing the Accomplishments Attributable to Federal Subsidies  Argument that federal subsidies have been effective because municipal waste treatment has progressed measurably is falsely motivated  An increasing percentage of the population is served by facilities using at least secondary treatment  Observed improvement in wastewater treatment cannot be attributed fully to the grant program

11 Analysis of the POTW Funding Program Inefficiencies in the Federal Grant Program  Lack of Incentives  Policy Response  Equity Implications

12 Controlling Nonpoint Sources Nonpoint Source Management Program – a three-stage, state implemented plan aimed at nonpoint source pollution  Best management practices (BMP) – strategies other than effluent limitations to reduce pollution from nonpoint sources

13 Controlling Nonpoint Sources Devising and Updating a Framework  In 1989, the EPA developed its Nonpoint Source Agenda for the Future to help define national goals for nonpoint source pollution and to find appropriate mechanisms to achieve them

14 Controlling Nonpoint Sources Watershed Approach  Watershed – land areas that drain into a particular water body  Attending to the watershed allows public officials to gain a better sense of the overall environmental conditions in an area

15 Analysis of Controls on Nonpoint Sources Delegating Control to the States: The Pros  Variability of Nonpoint Source Pollution  Land Use Practices

16 Analysis of Controls on Nonpoint Sources Delegating Control to the States: The Cons  Information Deficiencies  Poor Monitoring Systems  Inconsistent Controls

17 Analysis of Controls on Nonpoint Sources Analyzing the Federal Role in Nonpoint Source Controls  Resource Allocation Federal funds are needed to fill information voids about nonpoint source pollution  Coordination with Other National Programs Conflict between water quality objectives and other regulations needs to be resolved at federal level

18 Proposals for Reform: Using the Market Market Approaches to Point Source Pollution  Effluent Fees Volume-based effluent fee – a fee based on the quantity of pollution discharged Pollutant-based effluent fee – a fee based on the degree of harm associated with the contaminant being released  Tradeable Effluent Permits Tradeable effluent permit market – the exchange of rights to pollute among water polluting sources

19 Proposals for Reform: Using the Market Figure 15.2 Cost-Effectiveness of a Per Unit Effluent Fee

20 Proposals for Reform: Using the Market Figure 15.3 Inefficiency of a National Per Unit Effluent Fee

21 Proposals for Reform: Using the Market Market Approaches to Nonpoint Source Pollution  Product Charge – fee added to the price of a pollution generating product based on its quantity of some attribute responsible for pollution  Effluent Reduction Trading Within a Effluent reduction trading policy – establishes an abatement objective for a watershed and allows sources to negotiate trades for rights to pollute Effluent reduction credits – tradeable permits issued if a polluter discharges a lower level of effluents than what is attained by law Effluent allowances – tradeable permits issued up-front that give a polluter the right to release effluents in the future