AN ECONOMIC-ANALYSIS OF CLEAN-WATER-ACT ISSUES

This paper presents an economic analysis of the incremental benefits a nd costs of clean water programs. Benefit estimates are principally ba sed on contingent valuation research on willingness to pay for clean f reshwater. These data are supplemented with estimated benefits for mun icipal and industrial water withdrawals and saltwater fishing. Cost es timates are largely based on Environmental Protection Agency ''needs'' data and on studies of nonpoint source pollution control practices. T he analysis suggests that Clean Water Act programs, as currently plann ed, may have incremental costs that exceed their incremental benefits. Several alternative scenarios, with different benefit and cost assump tions, support this conclusion. Importantly, the policy options examin ed in this study generally are not the least cost approach for attaini ng water quality goals. The analysis suggests that the focus on munici pal treatment facilities, as opposed to nonpoint source practices, is unlikely to be cost effective as a national strategy. The analysis als o suggests that the concept of ''needs'' has limitations when viewed i n a benefit-cost context. Finally, better information linking planned expenditures (costs) to expected ambient quality improvements (benefit s) appears necessary to plan efficient programs.