The Congressional Budget Office says local authorities may be better equipped to set drinking water standards than state, regional, or federal governments.
CBO, in a report requested by the Senate Environment and Public Works Committee, observed that the federal governments role in making decisions about environmental protection has expanded greatly since the early 1970s.
"In recent years, however, the Congress has considered returning some decision-making authority back to state and local governments. An important question when assigning decision-making authority is, which level of government is most likely to make decisions that balance all the relevant benefits and costs?"
CBO examined the question through two case studies; protection of drinking water and control of ground-level ozone.
t said, "Local governments generally have an incentive to choose efficient drinking water standards. Federal selection of standards is likely to be efficient only if state or local governments would fail to choose standards that represented their constituents best interests.”
"The current allocation of authority for selecting control methods and research responsibility for drinking water is generally consistent with the principles of economic efficiency."
Local handicaps
CBO said although local governments can best choose drinking water standards that their populations want and can afford, "The reality of the situation is otherwise: the federal government currently sets standards for drinking water protection."
Local handicaps
The paper said the 1996 Safe Drinking Water Act Amendments allow EPA, when setting standards, to consider the costs and benefits to large public drinking water systems as well as smaller systems unlikely to receive variances.
Local handicaps
"However, large systems serve most of the population. As a result, the impact on large systems will dominate any overall analysis of costs and benefits. Standards that pass an overall cost-benefit test, therefore, may not be efficient for small systems."
Local handicaps
CBO said in theory, water systems have considerable latitude in choosing treatment methods since EPA does not require them to use any particular technology for treatment to reach the standard.
Local handicaps
"In reality, however, that latitude is actually limited because water systems must obtain state approval of the control technology they use.
Local handicaps
"In turn, states are frequently reluctant to approve the use of less-conventional technologies that may allow systems (particularly small systems) to meet the standard at a lower cost.
Local handicaps
"The reluctance of states to approve those technologies has stemmed, in part, from concerns about their reliability … and doubts about the ability of systems to understand and operate the technologies effectively.
Local handicaps
"Those concerns are valid. Nevertheless, general agreement exists that water systems would benefit from a streamlined process of approval and an increase in control options."
Local handicaps
CBO said economic efficiency dictates that the federal government play a dominant role in determining and funding drinking water research, since its efforts can benefit multiple states simultaneously.
