Escolar Documentos
Profissional Documentos
Cultura Documentos
Overview of Policy
Safe Drinking Water Act (SDWA) of 1974
Authorized EPA to set standards (shifted responsibility from the Public Health Service) All contaminants were addressed, not just bacteria Accelerated standard-setting; imposed lead ban; improved protection of groundwater Adds risk assessment and benefit-cost analysis to standard-setting; establishes a Drinking Water State Revolving Fund (DWSRF); promotes prevention
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Benefit-cost analysis and risk assessment govern which contaminants to control and standard setting Establishes National Contaminant Occurrence Database (NCOD) to identify contaminants
level at which no known or expected adverse health effects occur with margin of safety; not enforceable highest level permitted; as close to MCLG as feasible; enforceable treatment technology that makes MCL achievable
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Bottled Water
Not directly regulated under SDWA Controlled by the FDA, not EPA FDA must adopt EPAs standards for drinking water FDA has own standards for aesthetics and health
Economic Analysis
Standard-Setting
Federal Role
MCLGs are benefit-based Before 1996 SDWA, MCLs also were benefit-based, since MCLs link to MCLGs
1996 SWDA amendments requires EPA to
Must determine whether benefits of a new MCL justify costs Important because ignoring costs means MCLs could be set to maximize benefits, causing overregulation
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Maximum TSB
TSB
overregulation
Ae
AB
Incremental Benefits Estimated value of avoided illness and premature death $154.2$218.4 million per year Incremental Costs Treatment, monitoring, administrative expense $227.1 million per year Net Benefits $72.9 million to $8.7 million per year Since numerous potential benefits were not monetized in the EA, EPA argued that the true incremental benefits would justify the incremental costs, and announced the new standard in 2001
Source: U.S. EPA, Office of Water, Office of Ground Water and Drinking Water (December 2000). 10
Pricing Water
of water (Qd) is sensitive to price (P) Comparing domestic with international data
conservation
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price independent of use; marginal P = 0 efficient only if MC = 0 price increases with higher use at constant rate efficient only if MC were constant at same rate declining block and increasing block
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Declining Block
Price falls as Q rises
Intent is to encourage consumption so that scale
economies can be achieved Inefficient because it uses average cost pricing vs. marginal cost pricing
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Increasing Block
Price rises as Q rises
Provides incentive for conservation Efficient since it considers rising MC along with
MB of consumption
$ Price
Q of water use
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