INTRODUCTION This is the third in a series of reports to the Congress on the subject of the cost of treating liquid wastes that the Secretary of the Interior is charged to deliver annually, under the terms of the Federal Water Pollution Control Act. The first report in the series attempted to draw together and evaluate in gross fashion all available information on water-borne waste sources, treatment technology, and control deficiencies. The second report examined the processes of providing physical capital for waste treatment--the interaction of funds over time under the influence of developing technology, shifting regulatory requirements, rising demand, and normal replacement conditions. This report combines the concept of investment processes developed in the second report with the generally held concept of an investment gap that was evaluated in the first report. Its product is the definition of a rate of investment that will close the gap for municipal and industrial waste treatment within a five year period, given the continued pertinence of today's regulatory and technological conditions. Detailed studies of the pollutional impact of the inorganic chemicals industry and of concentrated animal populations are submitted as separate sub-reports. The report considers several issues germane to the policy decisions required with the expiration of current municipal grants legislation. The alternatives and conclusions reached in this report are intended to be illustrative and suggestive, not statements of policy. Economic analysis can provide insights into the consequences of alternative actions, but the political process must in the final analysis mold the necessary decisions within the context of total national interests and values. A number of subsidiary issues are considered, including the influence of industrial waste discharges on public investment outlays, the influence of location on unit investment, the status of broadly integrated regional waste handling systems, the incidence of recapitalization, the influence of price levels on investment, and patterns of change in the real cost (i.e., costs adjusted for price levels changes) of waste treatment facilities. Consideration of these and other sub-questions was consistently pointed to their relationship to the problem of deriving a normative annual level of investment, one appropriate to five year attainment of an investment equilibrium in the public waste treatment sector; and the force of Federal assistance programs on investments is a minor theme that pervades the report. |