Pollution Trends And US Environmental Policy: Lessons From The Last Half Century – Analysis


Half a century has passed since the US enacted a slate of environmental legislation in the 1970s, including the Clean Air Act, Clean Water Act, and Safe Drinking Water Act. This column reviews the literature and shows that air and water pollution are declining but greenhouse gas emissions are not because CO2 has been targeted less by environmental policy. These trends appear to provide large net benefits to US society and using cost-effective market-based policies does not appear to have systematic implications for the equality of environmental outcomes.


In the 1960s and 1970s, concern for US environmental quality grew rapidly. This growth had many causes, including an oil spill off the coast of Santa Barbara, photos of Earth taken from space, and a fire on the Cuyahoga River in Cleveland. Spurred on by these concerns, the federal government passed a slate of environmental legislation in the early 1970s, including the Clean Air Act, Clean Water Act, Safe Drinking Water Act, and many others. These laws had enormous bipartisan support.


A half century has passed since enactment of these laws, making it a good time to assess what has been learned from 50 years of environmental policy and economic research. Several studies have summarised what research and policymakers have learned about specific individual laws or pollutants (Olmstead 2010, Currie and Walker 2019, Schmalensee and Stavins 2019, Keiser and Shapiro 2019b).


In a recent review, I seek to provide a broad overview of pollution trends, policy impacts, and distributional consequences, which might be overlooked in a single research paper or when examining a single policy, pollutant, or method in isolation (Shapiro 2021). In the review, I assess the evidence for four hypotheses:


Hypothesis 1: Air pollution, drinking water pollution, and surface water pollution have declined substantially over the last several decades, although CO2 emissions have not.

Hypothesis 2: Environmental policy explains a large share of long-term decreases in air and water pollution.

Hypothesis 3: Air and drinking water policies have tended to produce benefits that exceed their costs; the evidence for surface water is much less clear.

Hypothesis 4: While the distribution of pollution across social groups is unequal, market-based policies and command-and-control policies do not have systematically different effects on the distributions of environmental outcomes.

I also highlight recent innovations in methods and data that have improved researchers’ ability to test these hypotheses. These advances include the use of administrative data on environmental goods; use of statistical cost-benefit tests; a focus on important but understudied policies; more sophisticated models of how pollution emissions in one location affect ambient pollution concentration in other locations (i.e. pollution transport); micro-macro frameworks that combine detailed data on individual firms and households with macroeconomic models of the entire economy; and a focus on how policy affects the distribution of environmental outcomes, particularly for low-income communities and communities of colour. I discuss each hypothesis in turn.


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~sEurasia Review, 2 February 2022