A paper mill releases chemicals into a river. There is one town downstream that uses the water. For every unit of chemicals released each week by the paper mill, the town must pay an extra $30,000 each week to remove it. If the mill is unregulated, it will release 5 units of chemicals a week. The total cost to the town for water service is typically $190,000 each week. Which policy would achieve the efficient level of reduction for the town and paper mill

Clean Water Act

Explanation:

Due to the release of chemicals into a river by a paper mill company which pollutes the water for the inhabitants of the town that uses the water, the best policy to enforce would be Clean Water Act.

This act is a federal law in the United State that is charged with restoration and maintenance of the natural integrity of the country's waters from pollution or actions that damage the integrity of the waters. It provides funds to help in the improvement of polluted water for individual states.

The Clean Water Act (CWA) is the primary federal law in the United States governing water pollution. Its objective is to restore and maintain the chemical, physical, and biological integrity of the nation's waters; recognizing the responsibilities of the states in addressing pollution and providing assistance to states to do so, including funding for publicly owned treatment works for the improvement of wastewater treatment; and maintaining the integrity of wetlands.[2]

Under this policy, individuals or companies that are responsible for contaminating the water with pollutants are charged to court and tried. One of such case was Edward Hanousek, Jr v. United States lawsuit where during a rock removal process an equipment ruptured a pipeline and thousands of gallons were spilled into the Skagway river. The company was sued and convicted by the US government.

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