Should voluntary actions to improve water quality require a regulatory nudge?

Missouri_River_near_Hermann_9-1990

Water quality is a huge problem in many parts of the world. People and animals need clean and uncontaminated water to live. But people also work in and live near enterprises that can create serious risks of contamination, so balancing our interests in producing with our interests in drinking safe water can be a challenge. For example, factories can discharge pollutants and chemicals into waterways, or they might incorrectly store waste resulting in eventual leaching into waterways and underground aquifers. Farms use fertilizers or other chemical inputs that drain into rivers and streams. Ranches and concentrated animal feeding operations produce a lot of animal manure that can contaminate water sources. How do we address these issues in a way that is fair to all stakeholders?

One way of doing this is educating relevant stakeholders and encouraging them to take voluntary actions to reduce their share of contaminants reaching water sources. An example is the Nutrient Reduction Strategy. This is an effort by 12 states, whose farms and businesses contribute to the problem of hypoxia in the Gulf of Mexico, to reduce contamination of the Mississippi/Atchafalaya River Basin (MARB). The US Environmental Protection Agency (EPA) coordinates the effort and encourages states to develop their own strategies “for implementing and developing load reductions,” according to the EPA’s website on the topic (here). This website also links to each state’s strategies and reports on their progress.

Important here is that the EPA “calls” for states to develop and implement nutrient reduction strategies, but it doesn’t require them to do so. In effect, this creates a classic prisoner’s dilemma. While all states recognize the importance of reducing contamination of the Mississippi River, the ideal is for 11 states to do this aggressively while the 12th state does it slowly, since regulations can be costly and unpopular. But if all states face this incentive, then the push for states to get the job done is weakened. So, sometimes a regulatory or legal nudge is needed to move all states to a cooperative outcome.

One way of doing this is to bring a lawsuit against a state that does not seem to be making the progress that one thinks it might otherwise have completed. This recently happened in Iowa. According to a Feedstuffs article, “Groups sue Iowa over water runoff. Suit alleges state of Iowa is failing to protect its waterways from farms.” The lawsuit states the following, as reported in the Feedstuffs article:

“The most recent ‘Iowa Nutrient Reduction Strategy Progress Report’ was released on March 7, 2019. The report acknowledges that adoption of the strategy’s agricultural best management practices was not making sufficient progress towards its nonpoint-source nutrient reduction goal. While annual progress continues in the implementation of these practices, early [Nutrient Reduction Strategy] efforts only scratch the surface of what is needed across the state to meet the nonpoint-source nutrient reduction. Progress has occurred, but not at the scale that would impact statewide water quality measures. Local water quality improvements may be realized in the short term where higher densities of conservation practices are in use, but the ability to detect early trends in measured water quality will vary from case to case. Statewide improvements affected by conservation practices will require a much greater degree of implementation than has occurred so far.”

However, lawsuits can be a double-edged sword. On the one hand, if successful they can push state legislatures to be more proactive in promulgating laws to reduce point and non-point water pollution. On the other hand, defending against lawsuits diverts government attention away from the very thing the lawsuit stresses. According to one farmer quoted in another news report of the Iowa lawsuit (here), “At a time when farmers are struggling financially from low commodity prices and also now from historic flooding, this lawsuit is a low blow. It will divert the state’s financial resources from implementing soil and water conservation practices, and also divert resources away from helping our farmers recover from the latest natural disaster.”

The ideal, of course, is for all of us to recognize the responsibilities we have to be mindful of the environment and our role in contaminating it. Stewardship is a good word here. Those who intensively use natural resources have a particular responsibility to be wise stewards over those resources and to be cognizant of how their actions affect others. Solving the prisoners dilemma is possible without formal laws and regulations, but it requires that everyone cooperative and share the burden.

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Author: Harvey James

Professor, Agricultural and Applied Economics, University of Missouri Editor-in-chief, Agriculture and Human Values

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