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3.3. Water Pollution Control

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Savings from Economic Incentives

Anderson and Lohof (1997) describe several incentive-based mechanisms that are being used to influence either the cost or magnitude of water pollution activities. The report describes five programs including effluent charge systems, reporting requirements, liability rules, and trading of effluent discharge credits between point and nonpoint sources or among point sources. These programs, along with the likely magnitude of compliance cost savings are described in this section. Point source programs dominate this list; the only nonpoint incentive programs involve trading with point sources. Currently there are no incentive-based programs under the Safe Drinking Water Act, nor are any known under state authorities.

Liability rules as an economic incentive are described in this section. While impacts on water resources are the main focus of several of the liability provisions of federal law, some provisions also would apply to releases of pollution to air or land that cause harm.

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