Regulating with Environmental Priority


Governmental regulation of water pollution, diversion, and distribution does not exist in all countries, and even where it does, it is not strict enough to eliminate the issue of water scarcity and protect water sources. In countries such as the United States, where environmental regulation has existed for over 40 years [1], many legal decisions are made using economic rationale. They use cost/benefit analysis to establish the best limit to set or the “most efficient” standard to use. The reason that cost/benefit analysis cannot be used as the basis for environmental (or specifically water) regulation is that, when analyzing marginal cost and marginal benefit, cost/benefit analysis does not take into account who bears the cost, and who reaps the benefit. For instance, when the United States Environmental Protection Agency permits Tyson Fresh Meats industry to dump animal waste (nitrates and nitrites) into the Missouri River according to cost/benefit analysis, the limit is set at the “economically efficient” amount (where the marginal cost of reducing the amount of waste they dump into the river intersects with the marginal social cost of the waste in the river). Unfortunately, it is the people downriver who have to deal with the unpleasant smell, sight, and danger that ingesting nitrates and nitrites poses for infants, not the company which is polluting the water. Tyson is given no incentive to improve their pollution reduction methods, because it is not of economic interest to them; they do not reap the benefits of pollution reduction. This result of an uninvolved party being affected by the economic decisions of another party is known as an externality.

The powerful firms, ones that are economically successful, have the financial abilities to develop new technologies, yet, they are the last ones inclined to take the financial and technological risk of innovation because they have no need for it. Environmental regulation can give companies like this a reason to innovate.


Figure 1: E* is the point which is considered “economically efficient.” [1].

In order to give humans the ability to access adequate amounts of fresh water and protect the water source for future accessibility, environmental regulations of water pollution, diversion, and distribution must exist. Where regulations do already exist, governments must disassociate from the economic rationale method of regulation,and instead make them in accordance with the goal of supplying societies with enough water, while ensuring that the natural resource will exist far down the road, and will have the capability to ensure the coming generations’ water supply.


Countries without environmental regulations

In order protect the water sources globally, environmental regulation must exist in all countries. To do this, guidance must be supplied on a global scale to the countries which do not currently have regulations.

The International committee will follow these steps to make water regulation in every country an achievable goal. Under the processes of the International committee (detailed below), leaders of nations and regions are given a model of necessary actions which will foster their abilities to manage and allocate water responsibly. All countries will have different ways in which they make agreements depending on standing relations, but united goals will enhance communication, technology sharing, and the general state of international affairs. The intention of this process is not to command a country in how they will implement regulation, but only to give them the tools and guidelines necessary to regulate in the way that works best for each individual country.

Under the International committee, a group of experts will consider the population, industrial activity, water use efficiency, and natural resource abundance to set both effluent and diversion limitations for regions which use said source for water or energy supply. For each water source, a Final Output Standard will be put in place. For clarity, we will set forth definitions and explanations of various terms and methodologies, all of which will be used and applied as presented:

  • Final Output Standard: It is the responsibility of the group to determine the untouched output of water necessary in order for a river or other water source to sustain all dependent life forms, including wildlife and aquatic species of plants and animals, and protect the water source for future use, within an adequate margin of safety. The final output standard may not take into account economic situations of the nations.
  • Untouched Output: the amount of water present at the end of a river which has not been contaminated beyond International Water Quality Standards
  • International Ambient Water Quality Standards: The Standards are set on a pollutant- by- pollutant basis to protect public and environmental health. These standards have already been listed by the U.S. EPA and are sufficient for use internationally.
  • Diversion and Effluence Limitations: After Final Output and Ambient Water Quality Standards are set by the group for each international water source it is the responsibility of a representative from each country within a River Dependent Region to establish a plan for meeting them. The representatives should agree on diversion and effluence limitations (how much water may be taken out and how much pollution may be put into a water source) for each country. Many factors must be considered when setting diversion limitations. These include, population served, uses of water, existing technologies, existing water sources, and room for improvement of technologies. These factors help establish a country’s need, possible improvement, and the global benefit (if any) that may be felt by setting a limitation which is either high or low. We recommend that a treaty is signed between these countries once limitations are set.
  • River Dependent Region: all countries supplied by the river or water source addressed. For example, the RDR of the Amu Darya River would be Uzbekistan, Turkmenistan, Afghanistan, Tajikistan, and Kazakhstan.

After a River Dependent Region agrees on limitations for each country, the nation must establish a plan which sets effluence and diversion limitations on companies, regions, governments, and other polluting and consuming bodies in order to meet these limitations.

Depending on the government, they may decide to regulate all diversions and effluence, or pass the regulating responsibility down to regional, state, or local governments.

If a river does not meet the Final Output or Ambient Water Quality Standard, the River Dependent Region will be labeled as “not in attainment.” Within 90 days of being listed as a River Dependent Region not in attainment, the countries involved must meet to establish a plan on how to come into attainment. Within 120 days of listing, the River Dependent Region must present this plan to the group for review and approval. If the group does not approve, they may edit the plan as necessary to retain an adequate margin of safety.

To avoid discouraging technological growth, countries which implement the strongest and most efficient water technologies (including distribution infrastructure, sewage and public water treatment, industrial pollution technologies, as well as reuse and recycle plans) will be given proper variance if its River Dependent Region does not make Final Output or International Ambient Water Quality Standards. These countries may also apply for International Best Available Technology Grants, in which they are encouraged to expand their technology and help make it available for other nations.

International Best Available Technology Grants

Countries with the best technologies in a certain field are encouraged to share these technologies. Grants are given to countries which are willing to send workers and designers to other nations in order to implement the technologies there. This helps spread and create a market for a new technology. The grants also encourage others to strive to have the best technologies. Each year, nations, companies, and scientists from all over will come together to participate in the Water Technologies Expo. Here, prizes are given for the best new technologies each year. Creators of award- winning water technologies are listed and encouraged to improve their technologies yearly, ensuring that countries that adopted the winning technology do not remain stagnant in their water habits, but they also do not have to completely revamp their implemented technologies continuously. Groups can apply for many other grants after they have been awarded at the expo, and the more widely a technology is implemented, the more funding that will be available to an innovative group.

Variance from Diversion and Effluence Limitations

These can be applied for in two ways.

  • A country may ask for variance to be granted by their River Dependent Region. If this is the case, representatives from each country in the region will be asked to meet in the country of request and decide whether this country may be given variance. If they decide to allow the country variance, they must present a plan to the group which lays out how they still plan on attaining the Final Output Standard. For this reason, in most cases, the only way an RDR will grant variance is if, as a region, the quality of their water source is far above the Final Output and Ambient Water Quality Standards.
  • A country may apply for variance to the group (which, if given, also gives equal variance to the RDR) if:
    • They are in the process of developing new technologies which require more water today, but will use much less in the future with the technology which they are developing. We encourage the group, when writing permits for variance, to require a timeline in which the technology will be developed, and a plan for making the technology accessible to other nations.
    • They are in conflict with the surrounding countries, and additional pressure may cause a breakout of violence or war.

Countries with pre-existing environmental regulations 

In countries where environmental policy has a longer standing place and is more highly valued, regulators must disassociate from the economic rationale method of regulation. There are changes that may be made on the national and international levels in order to implement regulation that works to achieve the goals stated above.

  • Technology Forcing: Regulations must be stringent enough so that the only way a firm might meet a regulation is if it comes up with a new technology (or uses a technology that another firm comes up with to meet similar regulations). This way, the companies that are detrimental to water sources and cannot keep their pollution under control will die out.
  • Eliminating Discounting: In cost/benefit analysis, discounting is the process by which economic analysts put less weight on the future impacts of a decision. If a government is to view the costs of a form of pollution of divergence, the future costs should be considered with the same weight as immediate costs.

Another issue is untraceable pollution. It is difficult to track all sources of pollution, especially those which are illegally deposited in sewage systems, and those which flow into a water source in a diffused form. Governments should consider the effects of unmonitored pollution when setting limitations.



1. Ashford, N. A., & Caldart, C. C. (2008). Environmental Law, Policy, and Economics. Massachusetts : MIT Press.