The Costs and Benefits of Sanitation (and Water) Services

Transcription

1 The Costs and Benefits of Sanitation (and Water) Services Economics of Sanitation Initiative in SE Asia Guy Hutton 1 March 1, OECD Headquarters Paris

2 Improving evidence to help sanitation and water decision makers Governments may know the costs of investing in water and sanitation, but usually underestimate the benefits Economic arguments overshadowed by other issues and concerns To support DMs, further clarity on: Different sanitation options have different costs and benefits => need for making trade offs explicit Little is know about the performance of new promising interventions What evidence / conditions convinces investment of key actors in WSS Consumers? Private providers?

3 Dollar per capita per annum Not investing in sanitation has significant socio-economic impacts Impact per person is greatest in the lowest coverage countries International Dollar (ID) United States Dollar (USD) Cambodia Lao PDR Indonesia Average Philippines Vietnam Source: Economic impacts of sanitation in Southeast Asia. WSP/World Bank..

4 Poor sanitation has major and diverse impacts Tourism User preferences Environment Water Health 1 Cambodia Lao PDR Indonesia Philippines Vietnam Source: Economic impacts of sanitation in Southeast Asia. WSP/World Bank..

5 BENEFIT-COST RATIO 1 1 Global evidence: Sanitation is a good buy! Including value of health (diarrhea) and access time gains only the return on investment is at least times 1 Sanitation WSS Sub-Saharan Africa East Asia & Pacific South Asia Non-OECD Source: Global cost-benefit analysis of countries off-track to meet WSS MDGs. WHO..

6 Global evidence: Sanitation is a good buy! Economic Rates of Return for selected projects of development banks are consistently from 1% to % % % % % % 1% % Source: preparation of economic briefings for High Level Meeting on Sanitation and Water for All: a Global Framework for Action, UNICEF & WaterAid.

7 ESI-: Benefit-cost ratios indicate moderate to high returns Cambodia Yunnan Rural Rural sites 1 Qiubei 1 Dry pit 1 Dry pit Wet pit 1 Wet pit Shared Pit latrine Septic tank UDDT Biogas 1 1 Indonesia 9 Philippines 9 Slum Tangerang 1 Community Shared Wet pit Septic tank Urban coastal sites 1 ALABEL Wet pit ALABEL Septic ALABEL STF TAGUIG Septic tank TAGUIG STF TAGUIG Sewerage Source:Draft results. Economic assessment of sanitation in Southeast Asia. WSP/World Bank. 1.

8 Understanding the CBA methods and limitations is key to its use Main benefit components Health consistently the largest benefit Inter-site and country differences in health gain Access time is important Environmental (water) and reuse add value in some sites Costs Low investment costs do not mean the cheapest option (when considering annual) But high cost options not affordable to households Interpretation of results Quantified impacts: conservative estimation Non-quantified benefits (intangible, national impact) Other DM factors Land or housing not owned Households may prefer less efficient options Systems disrepair not demanded or high O&M Low connection rates to WWT plants and low demand for emptying

9 Benefit-cost ratio: actual vs ideal Performance significantly affected when adjusted for program effectiveness 1 1 Alabel Septage Treatment Facility, Philippines Capacity Utilization 1% Source: Draft results. Economic assessment of sanitation in Southeast Asia. WSP/World Bank. 1. 9

10 Conclusion: Reaping the Benefits of Sanitation High sanitation efficiency confirmed in SE Asia studies: Quantified impacts: some options more efficient Non-quantified aspects play a key role Need to maximize delivery efficiency: Population sensitization & demand creation Supply management affordable, well designed, constructed, utilized and maintained Rigorous monitoring and evaluation of sanitation interventions to maximize impacts Source: Draft results. Economic assessment of sanitation in Southeast Asia. WSP/World Bank. 1. 1

11 Thank You