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Selected Variables Affecting the Choice between Federal and State Regulatory Responsibility: Grounc~water Quality as an Illustrative Case l2 DAVID B. GOETZE Utah State University With the advent of the current federal administration in the United States, the debate over the appropriate roles of federal and state governments in exercising regulatory functions has become more strident. In the area of environmental policy the arguments seem particularly well drawn. Ordinarily, the pre- sumed superior capacity of the states to comprehend their own problems and be responsive to local needs is contrasted with the federal government's presumed ability to provide momen- tum in pollution control policy and to resist unwarranted pres- sures from organized interest groups.) What are the most ap- propriate roles for federal and state governments remains an unanswered question. Earlier practical commitments to de- fined federal and state roles in this country's surface-water- quality and air-quality programs are being re-examined, whereas the extent of federal involvement in many aspects of ground- water regulation is still in a discussion stage. The contention here is that the question remains unan- swered, in part, because many of the variables crucial to the choice between federal and state regulatory responsibilities have not been thoroughly examined. In this chapter, at least two variables that I believe have not received sufficient atten- tion are examined. These are the jurisdictional scope of deci- sion-making authority and the structural distance of decision makers from information on problem conditions and on pref- erences of affected individuals. These variables have an im- portant impact on the ability of decision makers to formulate efficient regulatory policies. Moreover, the scope of the juris- diction assigned to federal decision makers often differs from that assigned to state decision makers, and federal and state decision makers are at different structural distances from the points of origin of many important types of information. The 159 resulting implication is that if the arguments presented here are valid, then these differences will affect regulatory efficiency and the choice between federal and state responsibilities. Developing propositions involving jurisdictional scope and structural distance, however, is not intended to resolve the debate over the choice between federal and state responsibil- ities. These propositions are no more than hypotheses that can be verified only with observations from many policy areas. Also, variables other than the ones examined here certainly will have an impact on the federal-state choice. Nevertheless, these propositions can serve as part of an analytical framework within which the federal-state question can be investigated more ad- equately. In the course of developing these propositions examples in- volving groundwater quality regulation will be used. This is done for heuristic purposes, inasmuch as characteristics of groundwater-quality problems aptly reveal dimensions of the variables to be examined. Also, the general public has become concerned about groundwater-quality problems. Discussing various aspects of these problems may facilitate their early resolution. GROUNDWATER QUALITY AND ITS REGULATION The quality of the nation's groundwater has for some time now been threatened by contamination from the intentional or un- intentional deposition of mining, manufacturing, and agricul- tural wastes. The full extent of contamination is unknown, but already identified sources of contamination number in the thou-

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160 sands (Council on Environmental Quality (CEQj, 1981; Silka and Brasier, 1980; U. S. Environmental Protection Agency (EPA>, 19774. Moreover, the pressures exerted on groundwater quality from generated wastes will likely increase as regulatory pro- tection of surface waters and the air resource comes into full force and as the push for discovery and exploitation of new energy sources is accelerated (EPA, 1980a, p. 34~. The former activity diminishes the availability of waste receptacles, whereas the latter increases the volume of waste. Estimates pertaining to groundwater use suggest the full significance of these problems. For example, the U. S. Water Resources Council (1978, pp. 12-13) estimates that about one fourth of all freshwater used in this country is supplied by groundwater sources. This includes drinking water that ser- vices approximately one halfofthe U.S. population (EPA, 1977, p. 21; EPA, 1980b, p. IV-1. Most estimates also project in- creases in demand for groundwater in future years (EPA, 1980b, p. II-8. Despite these estimates and despite the projected growth of contamination problems, no general commitment that author- izes the exercise of comprehensive regulatory functions in the groundwater quality area has been made to a particular gov- ernment level. At the state level, groundwater quality is gen- erally regulated only in piecemeal fashion, usually in response to some eminent hazard that has aroused public alarm. Limited regulatory activities are sometimes undertaken through loose interpretation of public-safety legislation or legislation aimed at surface-water regulation (Bartelt, 1979~. At the federal level, sporadic regulation is authorized under the sole-source aquifer provisions and underground injection control program of the Safe Drinking Water Act of 1974, under various sections of the Resources Conservation and Recovery Act of 1976, and under the Surface Mining Control and Rec- lamation Act of 1977. These regulations apply only to circum- scribed activities (mining, hazardous-waste disposal) or to aqui- fers (as a sole source of a community's drinking water). Under present interpretation, however, federal laws do not authorize regulation of all activities that have a significant impact on groundwater quality. They also do not extend regulatory cov- erage to all usable aquifers. Spurred on by Congressional inquiries (Interstate and For- eign Commerce Committee, 1979; Government Operations Committee, 1980; Government Affairs Committee, 1980), the EPA began an effort in 1980 to examine questions involving the responsibilities of federal and state governments in regu- lating groundwater. Through a series of workshops (EPA, 1980b, 1980c) and public hearings, EPA developed a policy position on regulatory responsibilities that involves an expanded federal role, though no new federal legislation is proposed (EPA, 1980d, p. VII). Through agency rule making, EPA expected to exercise guidance and approval functions in the preparation of state plans and strategies for regulatory groundwater quality. It also expected to assume primary responsibility for development of a groundwater classification system that associates protection levels with groundwater uses. Further, EPA envisioned de- veloping and implementing national "requirements" or stan- dards for groundwater problems on a national scale. Finally, EPA anticipated considerable financial involvement, if not lev- DAVID B. GOETZE erage, in the development of state strategies and state utili- zation of the classification system. More recently, the present federal administration expressed a strong preference for state rather than federal responsibility for regulatory matters. Accordingly, the administration has pushed for a curtailment of the federal role envisioned in the EPA groundwater strategy. Nevertheless, I believe that con- sideration of an expanded federal role likely will continue perhaps more seriously at a later date. An examination of as- pects of the federal-state choice with reference to groundwater regulation is not without policy relevance. EFFICIENCY Before beginning such an examination, however, an investi- gator needs a clear idea of what criteria will be used to distin- guish between inferior and superior regulatory outcomes. In other words, a concept must be defined that permits evaluation of the effects of study variables. As suggested, jurisdictional scope and structural distance often assume different values at state and federal levels. We want to predict how regulatory outcomes might be changed by these differences and also know the basis for imputing worth, positive or negative, to the changes so predicted. A concept useful for evaluating regulatory outcomes is social efficiency. By itself, the term efficiency can take on many dif- ferent meanings,2 but here it pertains to assessments of aggre- gate human welfare. A regulatory outcome is socially efficient to the extent that it corresponds to what is desired by some designated population.3 This general criterion does not, how- ever, specify how the welfare of each individual is to be treated as a portion of aggregate welfare. A more precise concept, commonly referred to as Paretian efficiency, suggests that a particular outcome is efficient relative to the status quo if it results in welfare improvement for at least some members of a designated population without, how- ever, imposing welfare losses on other members of that pop- ulation. An outcome is Pareto optimal if no other outcome (among a set of feasible alternatives) results in welfare gains for some individuals without imposing welfare losses on others. The advantages of this evaluative criterion are several. First, it places emphasis on the actual effects of arrangements on human welfare as opposed to a variety of abstracted criteria (for example, coordination and integration), the achievement of which may or may not result in improved human welfare. Second, Paretian efficiency provides a conceptual basis for deal- ing with conflicts between the environmental, energy, eco- nomic, and health values commonly associated with the use of resources like groundwater. The use of this concept avoids reliance on a priori judgments about the relative worth of these values. Rather, it presumes that each individual can rank al- ternatives by weighing and trading off the perceived benefits and costs to him of the environmental, energy, economic, and health aspects of each alternative. An outcome is deemed in- efficient if, on weighing its various aspects, any individual ex- pects to suffer net costs from its occurrence. The value one individual places on an outcome does not need to be compared

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Federal and State Regulatory Responsibilities with the value another individual places on the outcome to decide whether it is efficient. It follows that the distributive character of Pareto efficient outcomes cannot be, in at least one sense, adverse. Benefits accruing to some individuals are not permitted to justify the imposition of costs on others. The rich may, indeed, get richer, but not at the absolute expense of the poor. A major disadvantage of the criterion is that in the real world a Pareto efficient alternative to the status quo sometimes does not exist.4 Someone may be a loser no matter what alternative is chosen. In these situations, some other criterion must be used to evaluate alternatives. For example, alternatives may be ordered by use of a util- itarian criterion in which the benefits and costs that each in- dividual expects to experience from adoption of each arrange- ment are aggregated across all individuals of a designated population. Net benefits expected by one individual are al- lowed to offset, in some proportion, net costs expected by another individual. The alternative generating the highest total net benefit is regarded as the most desirable. If valid mea- surements can be obtained, the utilitarian criterion can be used to order virtually any set of alternatives and identify a uniquely superior alternative. However, application of a utilitarian criterion orders alter- natives only with respect to aggregate benefits and costs. The distribution of benefits and costs among individuals in the des- ignated population does not affect the derived ordering. In- equitable distributions may sometimes be associated with out- comes that are deemed most desirable through application of the utilitarian criterion. Because of this possibility, Paretian efficiency is employed as the favored evaluative criterion in the comparisons to follow. However, a utilitarian criterion is employed where Pareto ef- ficient alternatives do not appear to exist or cannot be iden- tified. In some cases, a utilitarian criterion identifies an alter- native that is also Pareto optimal. With some institutional arrangements, individuals are fully compensated for any losses they incur from choice of a particular alternative. Application of a utilitarian criterion forces selection of an alternative for which aggregate benefits exceed aggregate losses by the largest amount.5 If these excess benefits are employed to compensate initial losers so that they no longer suffer any losses, then the outcome is Pareto optimal by definition. Hence, Paretian and utilitarian efficiency are not mutually exclusive concepts, but as evaluative criteria, they will not always point to the same alternatives. To avoid confusion in the analyses to follow, the term "efficiency" will refer specif- ically to Paretian efficiency (without necessarily precluding the utilitarian sense) unless otherwise stated. Finally, we should note that practical application of these concepts can be complex or simple. Sometimes it involves the simultaneous consideration of the impacts of many variables on a multitude of other variables. More often it involves only notation that one alternative has a more desirable impact on one variable than does some other alternative. For example, we might note that federal regulation of groundwater entails fewer public expenditures than does state regulation. In this case, we assume that everyone prefers paying fewer taxes. 161 Second, we assume that the two alternatives have a similar impact on other variables that have public value. We might assume, for example, that federal and state regulation of groundwater would result in the same levels of groundwater contamination. Assumptions of this latter type, though com- mon, are often tenuous. Sometimes, our only real defense of this type of assumption is that we just have no evidence, one way or the other, concerning what impact the alternatives have on other variables. This circumstance is general to many forms of systematic inquiry, however, and does not diminish the value of isolating particular relationships with the intent of clarifying their character. In the analyses to follow, I examine relation- ships involving jurisdictional scope, structural distance, and regulatory efficiency using groundwater-quality regulation as an illustrative case. JURISDICTIONAL SCOPE OF DECISION-MAKING AUTHORITY The jurisdictional scope of authority assigned to federal decision makers often differs markedly from that assigned to state de- cision makers. Obviously, state boundaries delineate the larg- est jurisdictions assigned to state-level decision makers. On the other hand, federal decision makers, especially those entrusted with important policy decisions, may have jurisdiction over the entire nation. When they do not have a national scope of ju- risdiction, federal officials are likely to exercise authority over regions that encompass many states. For example, the EPA maintains 10 regional offices each of which has responsibility for regulatory efforts in regions that include from two to eight states. These jurisdictional differences between state and federal levels imply that constituencies affecting and affected by de- cisions differ accordingly. Below, I argue that the efficiency of outcomes generated by regulatory institutions at these levels is likewise affected. However, the definition of an appropriate constituency or scope of jurisdiction for making decisions about the provision of any public good (including regulatory goods) is often re- garded as a normative issue. It may be argued, for example, that only those individuals or groups affected in a more than vicarious way by a groundwater policy should have a voice in the selection of that policy.6 Indeed, a strong case can be made for this position. Individuals often hold preferences for policy outcomes that do not have any particular consequences for them. However, there is no obvious ethical reason why indi- viduals should have influence over policies that have value for them only because they feel empathy for others or believe that the social conditions they desire for themselves should be uni- versally pursued. Allowing these individuals to exercise deci- sion-making influence within a particular jurisdiction results in the dilution of the influence of those who are affected by de- cisions in a substantive way. A sense of democracy violated seems to follow. In principle, allowing only those individuals substantively affected by decisions to exercise influence within a defined jurisdiction does not seem to exclude consideration of the in-

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162 terests of future generations who one day may be affected by present decisions. Because future generations cannot now ex- ercise influence, incorporating their interests requires reso- lution of the operational problems of identifying what those future interests will be and who should represent those inter- ests in the present. The magnitude of these problems may pose an obstacle to the proper representation of future generations, but the inclusion criterion expressed above does not. Conceivably, the inclusion of only those with substantive interest may result in the exclusion of no one. In the area of groundwater regulation, for example, the regulation of a single aquifer could affect everyone because the ecology of the aquifer is changed. As part of a global ecology, changes in local eco- logical conditions can be expected to have ultimate global ef- fects, however small. Thus, everyone is affected in the sense that they confront modified ecological conditions. Global ecological interdependence may be a fact, but many particular interdependencies are likely to be trivially small. As McMillan (1976, p. 50) points out in an analogous context, if jurisdictional lines are not based on differences in the magni- tude of these interdependencies, then "everyone should have a say in everything and that is not satisfactory in theory or . ,, practice. In contrast, jurisdictional lines could be drawn in a way that accounts for differences in the importance individuals attach to the problem effects they experience or, perhaps, more prac- tically, in a way that accounts for differences in the amount of actual problem effects (e.g., physical, economic) to which in- dividuals are exposed. In any case, jurisdictional assignments based on each of these two criteria ought to overlap signifi- cantly. Individuals who feel strongly about a problem tend to be those who are exposed to the largest number of problem effects. 7 McMillan (1976) examined the jurisdictional issue and found that application of an efficiency criterion complements the nor- mative position expressed above. He demonstrated theoreti- cally that the exclusions from a decision-making jurisdiction of some individuals who have only slight interests in an issue improved the efficiency of decisional outcomes over jurisdic- tional assignments in which every individual with at least a slight stake in an issue was included. The evaluative criterion applied was utilitarian efficiency with no compensation being paid to those suffering net losses from decisional outcomes. The decisional mechanism employed for choice between two alternatives is majority rule. McMillan's results cannot yet be fully generalized to juris- dictions in which various decisional mechanisms are employed nor to situations in which many choice alternatives are possible. Even if they were, we still would be unable to project with much confidence what jurisdictional assignments would be most efficient in our groundwater example. The problem effects orig- inating from particular groundwater aquifers are usually dis- tinguishable from the effects originating from other aquifers. But important aquifers range in areas from less than a few square miles to dimensions transcending the borders of many states. Moreover, many of the effects of a groundwater-quality problem are physical (though not all) and limited in scope by the dimensions of the aquifer. Accordingly, jurisdictional as- DAVID B. GOETZE signments that encompass most individuals affected by an aqui- fer problem, while excluding those experiencing only slight effects,8 will vary approximately with the dimensions of the relevant aquifers. The type of uses to which an aquifer is put, the scope of economic effects of aquifer problems, and distri- butional characteristics of user populations will, of course, affect the strength of this correlation. Knowledge of these variable values is currently scarce.9 Nevertheless, the arguments advanced here imply that a fed- eral jurisdiction would be more efficient, other things being equal, for deciding on policies for aquifers with boundaries transcending the borders of many states. lO For many problems, then, the dimensions of the aquifer itself define a lower bound for the scope of important problem effects. For multistate aqui- fers, a particular state jurisdiction is obviously too small for deciding on all regulatory policies. For aquifers with more limited dimensions, the uncertainties regarding the scope of problem effects make projections about the most efficient ju- risdictional assignments speculative. Still, it seems likely that for most intrastate aquifers, important problem effects will not transcend state borders. The relationship posited here between jurisdictional scope and efficiency implies that federal regula- tion of these aquifers would be more efficient than state reg- ulation. STRUCTURAL DISTANCE It also is hypothesized here that the structural distance of de- cision makers from problem conditions and from information on individual preferences affects the efficiency of institutional outcomes. With traditional federal and state arrangements, reg- ulatory policies are decided on within representative legislative bodies or within administrative agencies authorized by these legislative bodies. The quality and quantity of information uti- lized by these centers in making decisions affects the efficiency of outcomes generated by them. For groundwater regulation, information about the definition, size, hydrology, quality, and uses of aquifers must be obtained as well as information on what quality levels and what uses of particular aquifers are preferred by relevant individuals. Downs (1967) and Tullock (1965) explain how information is affected by structural distance. They suggest that administra- tive systems with extended hierarchies deliver less accurate information to decision makers than administrative systems comprising less extended hierarchies. As information generated by the grass-roots level is passed from one hierarchical level to another, it is reduced and modified. The information is reduced so that the smaller number of individuals at the next higher hierarchical level can absorb all the information trans- mitted from below. The information is modified (perhaps only by discretionary reduction) to enhance the personal goals and interests of each individual who handles and interprets the information. The more levels through which the information must pass before being transmitted to decision makers, the more distorted the information is likely to become. To make some decisions about groundwater, federal decision makers must rely on state hierarchies (or, less likely, create

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Federal and State Regulatory Responsibilities parallel hierarchies) to provide them with information describ- ing the relevant problems. In the early phases of the sole- source aquifer program, decision makers at EPA determine whether aquifers are to be categorized as sole drinking-water sources. In addition, as part of the groundwater regulatory strategy, proposed in 1980, EPA envisaged taking responsi- bility for devising a general groundwater classification scheme (EPA, 1980d). The details of this plan are not precisely stated but could include the analytical construction of categories de- fined by groundwater quality and aquifer use as well as official placement of particular aquifers into these categories. The in- formation needed to make these decisions, especially that per- taining to existing groundwater uses and community prefer- ences for alternative uses, is or will likely be transmitted through state as well as federal hierarchical channels. This appendage of a federal structure (characteristic of programs involving fed- eral oversight of state programs) over which information must flow can only serve to distort further the character of the re- quired information. Efforts to prevent distortion by creating, for example, duplicate channels of information, are usually very costly. Because state decision makers can obtain more accurate information, they should generate more efficient outcomes at least as a function of structural distance. However, some types of information are resistant to distor- tion from transmission over hierarchical channels. Any infor- mation that can be codified or quantified can be transmitted without interpretation, sometimes bypassing hierarchical chan- nels through electronic transmission. Parameters of ground- water quantity and quality are easily codified. Information on these variables is likely to be as accurate when delivered to federal decision makers as it is when transmitted no further than the state level. For other types of information, appropriate interpretation yields value. Information of a research nature often requires highly theoretic interpretation to bring comprehension to the technical nature of the problems (including institutional prob- lems) and their solutions. Data on community preferences for alternative aquifer uses are often unanodized and largely im- pressionistic. Were such data to be collected in a systematic fashion, analytic interpretation of the results would still likely be needed in order that they be utilized meaningfully in the choice of aquifer use. This type of information seems partic- ularly susceptible to summarization and distortion as it passes over hierarchical channels. A variable that has a strong effect on the significance of information-gathering efficiency is the degree of differentiation embodied in regulatory rules. Differentiation implies that each problem source or group of sources is regulated in a different way and that the information required to assess the divergence of the source from desired behavior will also differ. With in- creases in differentiation, the number of decisions that have to be made in implementing a policy increases. The amount of information needed to make these decisions also increases. If a particular level of government is more efficient in collecting the necessary information, its efficiency becomes more appar- ent as the information collection function grows in importance. At either the state or federal level, regulations could be promulgated that require all groundwater to be maintained at 163 a uniform quality level.~3 Conversely, regulations might be promulgated that permit the quality level of aquifers or portions of aquifers to vary as appropriate for the present or future uses of the groundwater, the present conditions of the aquifers, their relation to drinking-water supplies, or for some other reason. A permit system that embodies such a set of regulations gen- erates a larger number and type of decisions and more infor- mation requirements as the number of allowable quality levels increases and as the variation in contingent conditions in- creases. More decisions also have to be made as the number of sources requiring permits increases. Additional information must be acquired for each source added to those already under consid- eration for permits. For a federal agency to be as effective as state agencies in rendering "preferred" decisions, a federal agency must, it seems, bear greater administrative costs than the administrative costs borne by the state agencies. These additional administrative costs result from the extra procedures that a federal agency must implement to avoid distortion of information as it is transmitted to decision makers.~4 To reduce these additional administrative costs, a federal agency might opt instead to reduce the number of different decisions required. For example, the number of aquifer-use categories might be decreased. Uniform quality standards con- stitute the most extreme result of such a response. While re- ducing administrative costs, this response will create additional social costs definable in terms of costs incurred by industrial polluters. Costs incurred by industrial plants will, in part, be transferred to consumers of the industry's products. Consumers will certainly prefer an outcome where an industry's products are available at less cost. The anticipated abatement costs of an industrial plant will be less if the plant is able to locate near an aquifer that has less restrictive quality standards rather than near another otherwise identical aquifer that has more restric- tive standards. The average or mean quality of the two aquifers could hypothetically be equivalent to a quality level maintained for both aquifers through application of uniform standards.~5 An industrial plant will experience additional abatement re- quirements with uniform standards because both aquifers will have more restrictive standards than will the less restricted of the two aquifers where differential standards are applied. A resort to uniform standards will not necessarily enable federal agencies to reduce overall regulatory costs (administrative costs plus costs borne by industry) to the regulatory cost levels of state agencies. Besides, if application of uniform standards does reduce overall costs, state agencies also can realize these sav- ings through similar action. The cost implications for industry of present federal regu- lations, state regulations, and sets of alternative future regu- lations could be examined in the above context. With the Un- derground Injection Control Program (UIC) of the 1974 Safe Drinking Water Act, for example, five classes of wells have been distinguished on the basis of their uses and their locations relative to drinking-water supplies. Each well must be placed in a class and regulated according to the requirements of that class. The reasoning expressed above suggests that expendi- tures made by industry to meet environmental regulations are likely to be reduced if a larger number of classes are employed , ,

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164 to distinguish and regulate wells. These gains must be weighed against increasing administrative costs, however, if classifica- tory and regulatory activities remain at the same governmental level. But if activities are moved from the federal to the state level, economies are realized in collecting information. Other things being equal, administrative costs are less at the state level. Current expectations are that most regulatory and clas- sificatory activities of the UIC will be conducted at the state level, though continued federal oversight could serve to offset the efficiency gains in collecting information that are posited for full state responsibility. CONCLUSIONS In this chapter, I hypothesize that jurisdictional scope and the structural location of decision makers will affect the relative efficiency of federal and state governments in regulating groundwater quality. The arguments presented here suggest that the jurisdictional scope of state governments is more con- ducive to regulatory efficiency than the larger scope of the federal government when the scope of problem elects is con- fined to state boundaries. When problem elects substantially exceed state boundaries the suggestion is that federal regulation is more efficient, other things being equal. The scope of effects of most interstate aquifers probably exceeds state boundaries. For these aquifers, then, an efficiency advantage is attributed to federal regulation. The closer structural distance of state decision makers to problem conditions and preference infor- mation, so it is reasoned, gives them an efficiency advantage over federal decision makers when information needed for reg- ulatory decisions is subject to distortion as it travels across hierarchical channels. Much, though certainly not all, of the information needed to make regulatory decisions about ground- water quality is of this type. Though perhaps providing important insight, these conclu- sions, nevertheless, do not resolve the issue of federal versus state regulatory responsibilityeven for the groundwater pol- icy area. For this particular policy area we still lack knowledge about the precise dimensions of every groundwater aquifer. Moreover, we have not adequately determined the type and quantity of information needed to make regulatory decisions. For that matter, we do not have empirical evidence to support the hypotheses posed. In a general sense, we also must consider other variables that affect regulatory efficiency. Differences in political pres- sures at federal and state levels, differences in resources, dif- ferences in legislation, and the regulatory decision rules de- rived therefrom are all likely to affect the relative efficiency of federal and state regulation. In some policy areas, the impact of these variables may even overwhelm the impact of jurisdic- tional scope and structural distance. Still, in other areas the effects of these latter variables could prove important in making a rational choice between federal and state regulatory respon- sibility. DAVID B. GOETZE NOTE S [National Water Commission, 1973; Okun, 1977; Congressional Re- search Service, 1978; CEQ, 1979. Sentiments focusing on the advan- tages of state-level responsibility have been expressed by various par- ticipants in the President's Task Force on Regulatory Relief. Commonly, an efficient alternative refers to the least-cost means to attainment of a preconceived objective (see Lang, 1980). This usage has only tangential relevance here. 3Individuals presumably account for the costs of alternative outcomes in formulating their preferences. fit is also possible that more than one Pareto efficient alternative exists. owe are assuming, of course, that at least one alternative exists for which aggregate benefits exceed aggregate losses. Much a list might include farmers who use groundwater for irrigation; community residents who rely on groundwater for drinking purposes; consumers of the products of an industrial or mining operation that discharges wastes into an aquifer; citizens who enjoy access to federal lands or lands of special ecological significance maintained, in part, by underlying aquifers; and taxpayers, who ultimately fund regulatory programs. 'For some issues, such as abortion, this logic may not hold true. Most of these issues relate to modes of personal conduct that derive from moral or religious feelings. As such, it should be easy to identify these issues and consider their jurisdictional implications. 8It is presumed that analyses such as McMillan's will eventually generate a specific value for the expression "slight effects." 9For aquifers that have special ecological significance and aquifers that may, one day, become important drinking-water sources, the rel- evant scope of effects will be especially difficult to ascertain. iA regional or multistate arrangement might even be preferable. However, regional arrangements not subsumed under a federal um- brella have had almost no success in exercising the historically meager regulatory authority allotted to them (Ingram, 1973; Green, 1980). Here, the author focuses on the only two likely alternatives federal and state arrangements. 1lKeech (1979), Mosher (1979), and LeGrand (1980) provide inter- esting descriptions of the types of information needed for groundwater regulation and of the problems encountered in its utilization. i2Quantity variables include aquifer dimensions, flows, number, and location. Quality variables include salinity, acidity, biochemical oxygen demand, bacteria counts, and pollutant indices. 3"Nonendangerment" standards are examples of such a policy. 14The assumption in this case is that a significant portion of infor- mation needed for regulatory decisions is not confinable and, hence, is susceptible to distortion. Hit follows that social costs resulting from pollution are conceivably, though not necessarily, similar in the two cases. REFERENCES Bartelt, R. E. (1979). State ground-water protection programs a na- tional summary, Groundu~ater 17, 89-93. Congressional Research Service (1978). Legislative History of the Clean Air Act Amendments of 1977, Environmental Policy Division, U.S. Government Printing Office, Washington. D. C. Council on Environmental Quality (1979). Environmental Quality, Tenth Annual Report of the Council on Environmental Quality, U. S. Gov- ernment Printing Office, Washington, D.C.

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Federal and State Regulatory Responsibilities Council on Environmental Quality (1981). Contamination of Ground Water by Toxic Organic Chemicals, U. S. Government Printing Of- fice, Washington, D.C. Downs, A. (1967). Inside Bureaucracy, Little, Brown and Co., Boston, Mass. Government Affairs Committee (1980). Report on Hazardous Waste Management and the Implementation of Resource Conservation and Recovery Act, Subcommittee on Oversight of Government Man- agement, U.S. Senate, U.S. Government Printing Office, Washing- ton, D.C. Government Operations Committee (1980). Interim Report on Ground Water Contamination: Environmental Protection Agency Oversight, Twenty-fifth report, U. S. House of Representatives, U. S. Govern- ment Printing Office, Washington, D. C. Green, P. S. (1980). Confounding influences, unintended impacts, and growth management strategies, Policies Studies J. 8, 893-899. Ingram, H. (1973). The political economy of regional water institutions, Am. J. Agric. Econ. 55, 10-18. Interstate and Foreign Commerce Committee (1979). Hazardous Waste Disposal, Subcommittee on Oversight and Investigations, U. S. House of Representatives, U. S. Government Printing Office, Washington, D.C. Keech, D. K. (1979). Groundwater quality standards a neutral view, Groundwater 17, 30-34. Lang, M. G. (1980). Economic efficiency and policy comparisons, Am. J. Agric. Econ. 62, 772-777. LeGrand, H. E. (1980). Management control plan for protecting ground- water quality, Groundwater 18, 2-6. McMillan, M. (1976). Criteria for jurisdictional design: Issues in de- fining the scope and structure of river basin authorities and other public decision-making bodies, J. Environ. Econ. Mgmt. 3, 46-48. 165 Mosher, D. C. (1979). The federal groundwater protection program tomorrow's undoing, Groundwater 17, 83-87. National Water Commission (1973). Water Policies for the Future, Final Report to the President and to the Congress of the United States, U.S. Government Printing Office, Washington, D.C. Okun, D. A. (1977). Regionali~ation of Water Management, Applied Science Publishers, London, England. Silka, L. R., and F. M. Brasier (1980~. The National Assessment of the Ground Water Contamination Potential of Waste Impoundments, U.S. Environmental Protection Agency, Washington, D.C. Tullock, G. (1965). The Politics of Bureaucracy, Public Affairs Press, Washington, D.C. U. S. Environmental Protection Agency (1977). Report to the Congress: Waste Disposal Practices and Their Effects on Ground Water, Office of Water Supply and Office of Solid Waste Management, Washing- ton, D.C. U. S. Environmental Protection Agency (1980a). Groundwater Protec- tion: A Water Quality Management Report, Water Planning Divi- sion, Office of Solid Waste, Washington, D. C. U.S. Environmental Protection Agency (1980b). Planning Workshops to Develop Recommendations for a Ground Water Protection Strat- egy, Office of Drinking Water, Washington, D.C. U.S. Environmental Protection Agency (1980c). Planning Workshops to Develop Recommendationsfor a Ground Water Protection Strat- egy: Appendices, Office of Drinking Water, Washington, D.C. U. S. Environmental Protection Agency (1980d). Proposed Ground Water Protection Strategy, Office of Drinking Water, Washington, D.C. U. S. Water Resources Council (1978). The Nation's Water Resources, 1975-2000, U.S. Government Printing Office, Washington, D.C.