Impact of upstream plant level pollution on downstream water quality: evidence from the clean water act

This is the first study to find empirical evidence that pollutant inputs from major point sources worsen downstream water quality, net of upstream pollution levels, and controlling for location-specific factors. We utilize panel data on monthly biochemical oxygen demand (BOD) concentration for a sample of 87 municipal and industrial plants located in the states of Maryland, Pennsylvania, and Virginia, for the period 1990-2003. Monthly dissolved oxygen (DO) from 67 locations is the measure of water quality. We find that an increase in aggregate BOD (for multiple plants) results in downstream net of upstream DO to decline by 0.001 mg/l. Despite the small magnitude (due to natural attenuation), the results are robust to distance traveled by pollutant and seasonal considerations of high temperature or low stream flow. We infer that point sources have a significant negative impact on ambient water quality net of non-point sources of pollution at upstream locations.