INCENTIVE-BASED NONPOINT SOURCE POLLUTION ABATEMENT IN A REAUTHORIZED CLEAN WATER ACT1

ABSTRACT: This paper summarizes key provisions of the Clinton Administration's proposals for change in the Clean Water Act. Two of the important themes for change are tougher controls for non-point source pollution and the use of market-based instruments. A detailed analysis of market-based abatement suggests limited potential for reducing costs. The keys to nonpoint source pollution control are clearer definition of property rights combined with changes in government programs that encourage polluting activities.