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EPA Proposes Information Collection on Cost-Benefits of Water Quality Improvement

October 14, 2021

EPA published a Notice in the Federal Register on September 29 proposing an Information Collection Request (ICR) on Estimating Benefits of Surface Water Quality Improvements.

As further explained in the Notice’s Supporting Statement, EPA's Office of Research and Development (ORD), the Office of Water (OW), and the National Center for Environmental Economics (NCEE) are collaborating on an integrated assessment model of water quality and economics that could "eventually be capable of estimating benefits for a wide range of surface water changes" and are seeking to collect data through a survey to help inform this effort.

EPA believes there is a lack of data, coupled with it having less time and fewer resources to commit to completing regulatory economic impact analysis, that together have policy analysts relying on a benefit transfer approach. A benefit transfer approach considers the results from published scientific studies to approximate or make assumptions on certain parameters or conditions for a current analysis that were not in the original study. While EPA has used this approach in the past, the Agency now believes it has "forced" analysts to make certain un-tested assumptions to fill data gaps on various cost-benefit relationship factors.

To rectify this situation, EPA hopes the empirical data received from this ICR can be used to better inform the assumptions policy analysis have been "forced to make" in the past. Survey questions attempt to get at these assumptions in four key areas, including:

  • A household's willingness to pay compared to the physical distance to improved resources. Known as the "distance decay" relationship, EPA assumes households are willing to pay for water quality improvements within 100 miles of their home and not willing to pay outside this range.
  • The amount of water improved and magnitude of improvements. Known as the marginal rate of substitution between quantity and quality, EPA assumes the benefit-cost on surface water regulations is a one-to-one trade off.
  • The values for human use aspects of water quality such as recreation and their value for water quality impacts on ecosystem function. EPA assumes that a single metric could reflect all water quality improvements but understands different aspects of water quality affect human use and ecosystem function dimensions differently.
  • The stated preference methods for estimating benefits. This will allow survey participants to change their answers, but EPA will record both to see if there are changes in stated preference as the participants understanding develops as the survey progresses.

NACWA encourages members to review the proposed survey questions. EPA anticipates recruiting survey participants through a probability-based internet panel or by mail invitation that will solicit random civilians over the age of 18 in the 48 contiguous states. 

NACWA is reviewing the proposed ICR as well as the specific survey questions and is considering submitting comments to the Agency before the November 29th deadline.

NACWA’s initial thoughts are that this type of survey and how these questions are structured - let alone the reality that participants taking the survey will likely have little knowledge or experience of water quality, ecology, or the Clean Water Act – create significant concerns about how the answers are used by the Agency to refine its "assumptions" on cost-benefit evaluations that could eventually be used to establish more stringent Clean Water Act regulations or compliance requirements. This type of voluntary survey might be better housed within an academic institution or nongovernmental organization.

If members have particular concerns with this ICR and/or the survey, please contact Emily Remmel, NACWA’s Director of Regulatory Affairs.

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