The report discusses the economic considerations in selecting an optimal groundwater quality monitoring system. Section I argues that poor specification of the property rights in groundwater is a major cause of excessive pollution. Section II examines groundwater adjudication and legislation and notes that government intervention through the authority of PL 92-500 will take the form of government-established and -enforced groundwater quality standards. Section III discusses the overall costs and benefits to society involved in groundwater quality monitoring. Section IV discusses monitoring needs for establishment of quality standards and their enforcement, and develops a cost-benefit framework for the analysis of groundwater quality monitoring. Section V examines an alternative regulatory approach based on 'waste relocation rights' for property owners. These rights would protect property owners' groundwater from pollution by others through specifying allowable pollutant levels. They would be transferable in the marketplace (like mineral rights) and enforcement of them would be carried out in the courts.

Prepared by General Electric Company, TEMPO, Center for Advanced Studies, Santa Barbara, Calif., under contract no. 68-01-0759. Includes appendix. Includes bibliographical references (pages 94-96). Item 431-I-24.