Pricing as a policy to reduce sewage costs

Compliance in Maryland with the Federal Clean Water Act will cost an estimated $3 billion. By charging a modest water/sewage fee for residential water use ($2 per thousand gallons), it is shown that sewage flows could be reduced, resulting in a compliance cost savings of $21 million. The cost reduction occurred even though only one third of the municipalities (heavy per capita water users) had to bear the increased price. Pricing policies are suggested as a method of reducing the costs of environmental standards.