How not to improve surface water quality: the EPA's involvement in Florida's new water pollution standards is unsound.

• Author: Earle, Robert L.

The U.S. Environmental Protection Agency has proposed standards for nutrient water pollution in Florida--pollution that nourishes some parts of an ecosystem, which then can overwhelm other parts. Unfortunately, the EPA proposal relies on command-and-control mechanisms rather than market approaches to limiting surface water pollution. In addition, in its proposed rule, the agency's approach to cost-effectiveness analysis will discourage other states from implementing water quality regulations on their own. This is a poor approach to improving the health of U.S. waters.

Nutrient pollution principally consists of dissolved nitrogen and phosphorus in various forms. While both of these occur naturally, they are also present due to human activity and can be found, for example, in industrial wastewater, water from waste treatment plants, and storm water runoff. These nutrient pollutants may have adverse health effects in high concentrations. The more immediate concern, however, is the nutrients' ability to disrupt an ecosystem by encouraging the growth of algae blooms that rob fish and other life of dissolved oxygen. Complicating matters, some ecosystems seem to be more sensitive than others to increased nutrient levels.

Florida's current "narrative" standard for these pollutants does not set a specific numeric limit on nutrient levels, but instead mandates that nutrient levels cannot exceed levels that result in an imbalance in the natural population of flora and fauna. In response to litigation and an expansion of its scope of activities under the Clean Water Act starting in the previous presidential administration, the EPA has proposed numeric (quantitative) limits on the nitrogen and phosphorus in Florida's lakes and streams. It is expected that Florida is the first of many states that will have numeric nutrient limits imposed on them.

Until now, the EPA's focus has been on setting numeric limits directly on point-source nutrient pollution--that is, pollution from specific large emitters. Under the proposed numeric criteria, nonpoint sources--the aggregation of many diffuse pollution sources in a given area--would also be affected because limits would be set on the level of nutrients in a body of water rather than the emissions from a particular source.

While there is nothing wrong, in principle, with setting numeric limits, the EPA's approach to Florida has a number of flaws, of which two stand out: First, the EPA decided not to use market-based approaches in its mandates, even though market-based programs have been used successfully to lower pollution. As a result, the potential cost savings and efficiencies from a market-based approach are lost.

Second and related, the EPA is avoiding performing a proper cost-effectiveness analysis because of apparent weaknesses in the statutory requirements, including requirements in the Unfunded Mandates Reform Act of 1995. As a result of the EPA's skirting of the act's requirements, states will be discouraged from implementing stricter water pollution regulations on their own.

BACKGROUND

Under the Clean Water Act, the EPA regulates both point and nonpoint sources for surface water pollutants. For point-source pollution...