The Evolution of the “Waters of the United States” and the Role of Economics

For nearly 50 years, the Clean Water Act (CWA) has served as the main environmental statute that regulates water quality in the United States. Yet the jurisdictional limits of the act, in terms of which waters are regulated, remain unresolved. This article reviews the complicated history of these waters of the United States (WOTUS) and discusses the important role of economics in understanding the benefits and costs of a narrow versus a broad definition of WOTUS. During the Obama and Trump administrations, several economic analyses arrived at different conclusions regarding whether to expand or reduce CWA protections. We examine the key components of these analyses, including a novel federalism analysis used to support deregulation of US waterways. In this analysis, the Trump administration assumed that states would fill regulatory gaps left by the federal government. We conclude with some thoughts about key issues for the Biden administration to consider as it develops its own definition of WOTUS as well as research priorities for economists seeking to inform the debate about WOTUS.