Federal policy has focussed on point sources. Subsidies have been used to support increased treatment of municipal sewer wastes. These subsidies are needed due to the public goods nature of wastewater treatment. B. Treatment of municipal sewage has been relatively effective in controlling this source of pollution, but is far from cost effective. Construction of sewage treatment plants in the 1970s has a rapid positive effect on water quality.
Policy is of the command and control variety.
There are clear incentives for cities to rely on capital intensive techniques due to subsidies and lack of federal funds to help cover operation and maintenance costs.