The Water Quality Act of 1965 (WQA)

The Water Quality Act of 1965 (WQA) was the first major statutory attempt to address the nation’s growing water quality problems. The Act proved to be a weak basis for enforcement authority, but did yield one major improvement: the development of ambient water quality standards. States were called upon to set their own standards and given flexibility to determine how standards would be met. The Act’s major weakness was that it gave no concrete authority to force effluent reductions by specific polluters.5 It was relatively straightforward to determine if ambient standards were being violated, but much more difficult to determine who was at fault.6
At the same time, however, economists were proposing effluent taxes as a policy that could both generate incentives to meet ambient quality targets and minimize the costs of doing so.7 Moreover, proponents of effluent fees received a receptive hearing in the political arena. The Environmental Pollution Panel of the President’s Science Advisory Committee recommended in 1965 “that careful study be given to tax-like systems in which all polluters would be subject to ‘effluent charges’ in proportion to their contribution to pollution .... Effluent charges have enhanced effects because individual polluters always have a prospect of financial gain from further reductions in their contribution to pollution.”8 In 1969, William Proxmire in the Senate and, in 1971, Lee Hamilton in the House introduced identical pieces of legislation calling for a national effluent charge.9 Ultimately, these efforts went nowhere. But they indicate that 30 years ago the effluent tax concept was considered to be a serious policy alternative.