By the early 18th century, waterways in and around cities in North America became choked with pollution ranging from tannery chemicals to untreated sewage. It was not until 1948 that the Federal Water Pollution Control Act was passed to protect interstate waters, such as the Mississippi River and the Great Lakes, which supported fisheries and drinking water needs. Because there was no central environmental authority, the Surgeon General of the U.S. Public Health Service was put in charge of developing programs to improve the quality of surface waters and groundwaters.

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More than 20 years later, the United States created its first federal agency dedicated to the environment. Richard Nixon was running for president in 1968 and, recognizing growing popular concerns about pollution, made environmental issues part of his presidential campaign. After Nixon won the election, Congress passed the National Environmental Policy Act, generally known as NEPA; but Nixon went further, creating the U.S. Environmental Protection Agency, or EPA, through a 1970 executive order (Table 13.5). New federal laws to strengthen pollution controls soon followed.

In 1972 the Federal Water Pollution Control Act, commonly known as the Clean Water Act (CWA), was thoroughly revised to “restore and maintain the chemical, physical, and biological integrity of the Nation’s waters” (EPA, 2012a). The act explicitly protects wetlands and estuaries from pollution and from dredging and filling.

In administering and enforcing the CWA, the EPA works closely with state and tribal governments to develop water quality standards, which play a pivotal role in judging how much of a pollutant may be discharged into a water body and which waters are polluted. States must survey their waters to determine which exceed the limits set by the standards and are categorized as “impaired.” States are also responsible for restoring impaired streams by reducing concentrations of pollutants.

The CWA has other important mechanisms for limiting pollution. For instance, if a paint manufacturer wants to discharge waste into U.S. waterways, it must apply for a permit. Permit applicants must demonstrate that the best available technology will be used to reduce the amount of pollutants discharged. The CWA also provides federal money for building or improving sewage treatment plants.

The CWA has continued to evolve. For example, the 1972 amendments to the CWA addressed only point sources of pollution, but its scope was expanded in 1987 to include nonpoint sources as well. In addition, the EPA has shifted from a case-by-case and pollutant-by-pollutant approach to an integrated watershed perspective on pollution regulation.

The Air Pollution Control Act, the first U.S. federal law to address air quality, was passed in 1955. The role of the federal government in controlling air pollution expanded with the Clean Air Act of 1963, and the Air Quality Act of 1967 established air-monitoring studies and point source inspections. The biggest step in pollution control came with the Clean Air Act (CAA) of 1970. This law authorized federal and state governments to regulate both stationary (e.g., electrical power plants) and mobile sources (mainly motor vehicles) of air pollution. According to the U.S. EPA, the 1970 CAA and 1990 amendments gave the EPA broad authority to regulate air pollution in the United States (Table 13.6).

Recognizing their common need to address the issue of acid rain, Canada and the United States signed the U.S.–Canada Air Quality Agreement in 1991. The agreement is organized around three parts, called annexes. In Annex 1, the United States and Canada committed to limits on emissions and timetables for reducing emissions that cause acid rain. The two countries also agreed to notify and consult with each other regarding sources of acid deposition within 100 kilometers (62 miles) of the border.

Annex 2 focuses on scientific, technical, and economic activities and research to improve understanding of acid rain. Although the agreement was stimulated by the problems associated with acid rain common to the two countries, the agreement provided a flexible framework that could be used to address other cross-border problems of air pollution. In 2000 it was expanded to address transboundary ozone pollution in Annex 3. The keys to the success of this U.S.–Canada Air Quality Agreement are recognition of common interest and, second, free and frequent communication and cooperation.

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Most of the tools that the EPA uses to protect our air, water, and soil are command-and-control regulations (see Chapter 2) that restrict the type and amount of pollution that can be released, the pollution-control technologies that must be used, and the type of environmental monitoring that must be implemented. For instance, since 1975, the EPA has set federal standards for the emissions of cars and trucks and generally required that they be outfitted with catalytic converters, which reduce the emission of carbon monoxide, unburned fuel, and, sometimes, nitrogen oxides (NO_x). Around the same time, the agency mandated reductions of lead in gasoline, banning the toxic metal, as a fuel additive, completely in 1995.

The EPA has also experimented with market-based approaches (see Chapter 2), pioneering the approach with its Acid Rain Program in the 1990s, following passage of the amendments to the Clean Air Act and U.S.–Canadian Air Quality Agreement. At the time, the agency sought to reduce emissions of SO₂ by 10 million tons and emissions of NO_x by 2 million tons below 1980 levels. The first phase of the Acid Rain Program, which began in 1995, focused on SO₂ reductions at 445 coal-fired power plants in the eastern part of the country. The second phase of the SO₂ reduction program, which was initiated in 2000, included over 2,000 generators fueled mainly by coal but also by oil and gas.

The NO_x reduction program also occurred in two phases. The EPA allowed flexibility on how electric utilities reduced their SO₂ and NO_x emissions. Companies could achieve these reductions through energy conservation, using more renewable energy sources such as wind and solar, installing pollution control technology, or switching to low-sulfur fuels. The program also permitted emission allowance trading, a market-based system for reducing SO₂ emissions. In this system, the EPA grants an electrical utility certain SO₂ emissions allowances for each of its electrical generators. If a particular generating unit emits less SO₂ than it is allowed, the utility may trade the unused allowances with other units in its system of generators. Alternatively, a utility can sell allowances to other utilities or save the allowances to be used to cover emissions in the future. This market-based strategy for pollution control has become a model for solving other environmental problems, such as fisheries (Chapter 8), water rights (Chapter 2), and carbon emissions (Chapter 14).

Regulations to control air pollution have been controversial due to the potential cost for industry. When controls on acid rain were proposed, for instance, the Edison Electric Institute, a lobbying group, predicted that the costs of controlling sulfur dioxide during just Phase I of the Acid Rain program would be $4 to $5 billion annually. Industry members projected that consumer utility bills would increase by 20% to 40%. In contrast, the EPA predicted annual costs would amount to $1 billion. In a review of the program, Don Munton, professor of international studies at the University of Northern British Columbia, found that these costs were overestimates, as he explained in the 1998 article “Dispelling the Myths of the Acid Rain Story.” The first years of the program cost only $836 million annually and utility bills actually increased an average of 2% to 4%. Munton concluded his review by stating that the Acid Rain Program was “a bargain.”

Other evidence is mounting that pollution controls can provide economic benefits that outweigh their costs. In a 2005 paper in the Journal of Environmental Management, Lauraine Chestnut and David Mills estimated that the total cost of Phase I and Phase II of the U.S. Acid Rain Program amounted to $3 billion annually (Table 13.7). The benefits included economic gains from reduced premature mortality and reduced chronic disease (morbidity) in the United States and Canada, as a result of controlling fine particulate pollution and ozone.

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To these benefits, the authors added the economic gains resulting from improved visibility in U.S. parks, improved recreational fishing in New York, and ecosystem recovery in the Adirondacks. The sum of these annual economic benefits totaled nearly $122 billion, approximately 40 times the costs.

That’s the story for acid rain, but what about the total economic benefits of the Clean Air Act? In 2011 the EPA estimated that by 2020 the costs of pollution control would amount to $65 billion, but that those costs would be dwarfed by the economic benefits, primarily through a reduction of premature mortality, which would have totaled nearly $2 trillion. In economic and environmental terms, it appears that it pays to invest in pollution control.