Ignoring The Storm Water Elephant

The picture on the left shows a farm field. The picture on the right could be a site being prepared for residential construction. Both of them receive rainfall, both of them allow runoff of sediments and contaminants and both of them impact the quality of surface water in nearby streams. What is the difference between the two? The picture on the right costs about $3,000 per acre more for storm water regulatory compliance than the picture on the left.

 

Lisa Jackson, the U.S. EPA Administrator, was in Iowa a few days ago with Agricultural Secretary Tom Vilsack (Iowa’s former Governor). She was visiting some farms to review runoff issues. After visiting the farms, Ms. Jackson told reporters:

I am ruling out the need for us to move directly to a regulatory mechanism when we have folks stepping up and are willing to do the conservation measures. 

Ms. Jackson believes that farmers are adequately addressing the issue of fertilizer runoff into water ways on a voluntary basis and they do not require regulatory oversight. While others may disagree, I will defer to Ms. Jackson's expertise.  My problem is that Ms. Jackson apparently has no such faith in land developers.

Six days ago, EPA released a draft permit that will further increases the regulation of discharge of storm water from construction sites. If all of the effluent limitation rules are put into place, it has been estimated that nearly one billion dollars in annual costs will be incurred at those sites. This is in addition to the existing costs of storm water regulation.  While current stormwater compliance costs can vary depending upon the regulatory scheme of the particular state and whether construction is occurring within an MS4 city, a rough estimate would place it at about $3,000 per acre in increased construction costs for compliance with the existing regulations.  The proposed new regulations will add to those costs.

Before concluding that this is a small amount to pay, bear in mind that these costs will be passed on to the home owner. A study conducted by the National Association of Home Builders found that for each $1,000 increase in home building costs, a certain number of potential buyers will be “priced out” of the market. This number varies from city to city, but for Des Moines,  a $1,000 increase will bump 522 people out of a home purchase. (In La Crosse, Wisconsin only 10 people will be priced out; in Atlanta, Georgia 4,022 people are affected).

So why not make the trade-off?  Well, because of that pesky thing called cost/benefit analysis.  These costs are being imposed on an industry that contributes less than 1% to the surface water contamination problem, while agricultural runoff creates well in excess of 50% of that problem.  For the dollars being expended and the loss of home sales, it is not possible to receive any significant benefit.

But even if you could justify the expenditure, my question is, why should there be there such a huge discrepancy in dealing with these two groups? I'm happy to agree with Ms. Jackson that agricultural runoff does not need the heavy hand of federal regulation and its accompanying costs. However, if she is not going to address the elephant in the room, it seems a bit unfair to require the expenditure of such huge sums to sweep up the peanut shells.

 

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