Environment & Poverty Times

07 2012

UNEP/GRID-Arendal

14 15 Millennium Development Goals and water

In 2000 governments committed to a wide range of Millennium Development Goals (MDG) that rely upon access to water. They also made a specific commitment to halve the number of people without access to clean water and adequate sanitation by 2015.

The 2010 update on progress towards the water-specific goals reports that 884 million – nearly 1 billion people – lack access to clean drinking water. When it comes to sanitation, 2.6 billion people do not have access to improved sanitation services. One in seven of those people without access to adequate sanitation services live in rural areas (WHO/UNICEF 2010).

At the current rate of investment progress, the Millennium Development Goals for sanitation will be missed by 1 billion people. Most of these people live in sub-Saharan Africa and Asia. Significant progress has been made in India and China (WHO/UNICEF 2010).

Water – Investing in natural capital

From Chapter 3, Water, Towards a Green Economy: Pathways to Sustainable Development and Poverty Eradication (UNEP 2011). Available at www.unep.org/ greeneconomy

Over the past two years the concept of a green economy has moved into the main- stream of policy discourse. Heads of state and finance ministers increasingly speak about the green economy; it is referred to in the text of G20 communiqués and discussed in the context of sustainable development and eradicating poverty.

UNEP’s green economy report, Towards a Green Economy, aims to debunk several myths and misconceptions about “greening” the global economy, and provides timely and practical guidance to policy-makers on what reforms they need to unlock the productive and employment potential of a green economy. Perhaps the most prevalent myth is that there is an inescapable trade-off between environmental sustainability and economic progress. There is now substantial evidence that the greening of economies inhibits neither wealth creation nor employ- ment opportunities. On the contrary, many green sectors provide significant opportuni- ties for investment, growth and jobs. For this to occur, however, new enabling conditions are required to promote such investments in the transition to a green economy, which in turn calls for urgent action by policy-makers.

Key messages in the water chapter Water, a basic necessity for sustaining life, goes undelivered to many of the world’s poor. Nearly 1 billion people lack access to clean drinking water; 2.6 billion lack access to improved sanitation services; and 1.4 million children under five die every year for lack of access to clean water and adequate sanitation

services. At the current rate of investment progress, the Millennium Development Goal for sanitation will be missed by 1 billion peo- ple, mostly in sub-Saharan Africa and Asia.

The existing inadequacies in provision of water and sanitation services generate considerable social costs and economic inef- ficiencies. When people do not have access to water, either large amounts of their dispos- able income have to be spent on purchasing water from vendors or large amounts of time, in particular for women and children, have to be devoted to carting it. This erodes the capacity of the poor to engage in other activities. When sanitation services are inad- equate, the costs of water-borne disease are high. Cambodia, Indonesia, the Philippines and Vietnam, for instance, together lose about US$ 9 billion a year because of poor sanitation – or approximately two per cent of combined GDP. Access to reliable, clean water and adequate sanitation services for all is the foundation of a green economy.

Continuing current practices will lead to a massive and unsustainable gap between global supply and demand for water with- drawal. This is exacerbated by failure to collect and treat used water to enable subsequent uses. With no improvement in the efficiency of water use, water demand is projected to overshoot supply by 40 per cent in 20 years time. Historical levels of improvement in water productivity, as well as increases in supply (such as through the construction of dams and desalination plants as well as increased recycling) are expected to address 40 per cent of this gap, but the remaining 60 per cent needs to come from investment in infrastructure, water-policy reform and the development of new technology. In the ab- sence of such investments or policy reforms, water crises will be even more serious.

Micro-scale infrastructure provision in Western Jakarta

In Jakarta, Indonesia, a significant proportion of the population lives in informal settlements. While the government does not want to legitimize the unlawful occupation of land, it realises that access to safe water and sanitary conditions is necessary. A private water utility, PALYJA, is responsible for the water supply in Western Jakarta and is expected to supply water to all residents, including those in informal settlements. To this end, PALYJA has a water-supply contract with the government whereby it is paid for the cost of delivering water to users, and for building and maintaining the necessary infrastructure.

As part of this process, PALYJA is trialling the provision of access to groups of informal houses by establishing community-based organisations. Each organisation is given access to a single master water meter and is responsible for the management of the community’s water-supply infrastructure as well as paying for the volume of water taken. MercyCorps has helped connect 38 households to a single meter, while USAID’s Environmental Service Programme (ESP) has brought 58 households together. Once established, the community signs a supply contract with PALYJA, with a special tariff arrangement to account for the fact that many households are using a single meter. Under this arrangement, both sides benefit: the community gets reliable access to an affordable waste supply, while PALYJA supplies a large number of houses with water at much lower overhead and administrative costs.

Source: Fournier et al. (2010) in UNEP (2011) Green Economy Report Economic impacts of poor sanitation

Together, Cambodia, Indonesia, the Philippines and Vietnam lose an estimated US$ 9 billion a year because of poor sanitation (based on 2005 prices). This amounts to around 2 per cent of their combined GDP, varying from 1.3 per cent in Vietnam, 1.5 per cent in the Philip- pines, 2.3 per cent in Indonesia and 7.2 per cent in Cambodia. The annual economic impact of inadequate sanitation is approximately US$ 6.3 billion in Indonesia, US$ 1.4 billion in the Philippines, US$ 780 million in Vietnam and US$ 450 million in Cambodia. In these four countries, the total value of this impact is US$ 8.9 billion per year. In 1991 a cholera epidemic swept through most of Peru and cost US$ 1 billion to control.* If one-tenth of this amount (US$ 100 million) had been spent on providing sanitation services, the epidemic would not have occurred.

*The epidemic also spread into several other countries in South, Central and North America. Source: World Bank, Water and Sanitation Programme (2008) and Tropp (2010) in UNEP (2011) Green Economy Report.

The five key dimensions of water security: indices and analysis Key dimension 1: household water security

Measured by access to water supply and sanitation services across rural and urban communi- ties and all income groups, with additional research in selected countries on sustainability and new indicators explored for peri-urban and rural areas. Key dimension 2: economic water security

Measured by efficiency and productivity of the major water-using sectors: agriculture, industry, and energy, with new indicators explored for allocative efficiencies to sustain security. Key dimension 3: urban water security Measured by supply efficiency, water-treatment technique, storm drainage and public involve- ment, with new indicators explored in a ‘water sensitive city’ framework. Key dimension 4: river health

Measured as the capacity of river basins to maintain their functions and services under pressure and threat from pollution and land-use change, with new performance indicators explored for river basin stewardship. Key dimension 5: water resilience

Measured by risk and resilience from water-related disasters – floods, droughts, windstorms and storm surges – with new indicators explored for adaptive capacity. Water Security Index

Measured as an aggregate of the five key dimensions, with sub-regional comparison and hotspot analysis, and additional applications explored for cities, river basins and regions.

Source: Asian Development Bank http://www.adb.org/Documents/Brochures/Water-Brief/awdo-a-preview.pdf See also the article on Asian Water Development Outlook 2011 on page 18-19.

The availability of an adequate quantity of water, of sufficient quality, is a service pro- vided by ecosystems. The management of, and investment in, ecosystems is therefore essential to address water security for both people and ecosystems in terms of water scarcity, the over-abundance of water (flood risk) and its quality.

Accelerated investment in water-dependent ecosystems, in water infrastructure and in water management can be expected to expedite the transition to a green economy. Modelling suggests that, under the green investment scenario, global water use can be kept within sustainable limits and all the MDGs for water achieved in 2015. With an annual investment of US$ 198 billion on average over the next 40 years, water use could be made more efficient, enabling in- creased agricultural, biofuel and industrial production. By 2030 the number of people living in a water-stressed region would be

four per cent lower than under ‘business- as-usual’ conditions and up to seven per cent less by 2050.

When investment is coupled with improve- ments in institutional arrangements, with entitlement and allocation systems, more extensive payments for ecosystem services, and improved water charging and funding arrangements, the amount which needs to be invested in water can be significantly reduced. Moreover opportunities to improve water management are being undermined by a significant proportion of water manage- ment policies and measures in other sectors, such as input subsidies. Resolving global water supply problems is heavily depen- dent upon the extent to which agricultural water-use can be improved. Irrigated land produces 40 per cent of the world’s food and, as populations grow, a significant proportion of this water will need to be transferred to urban, commercial and industrial uses.

Recent experience of private companies providing water to households

The Phnom Penh Water Supply Authority in Cambodia has seen major changes between 1993 and 2009. The number of connections increased seven-fold, non-revenue water fell from 73 per cent to 6 per cent, collection efficiency rose from 48 per cent to 99.9 per cent, and total revenues increased from US$ 300 000 to US$ 25 million, with a US$ 8 million operating surplus. After receiving initial grants and soft loans from international financial institutions, the utility is now self-financing. Tariffs increased steeply in the early years, but they have been held constant at around US$ 0.24 per m3

since 2001, because the combination of service

expansion, reduced water losses and high collection rates has guaranteed sufficient cashflow to cover debt repayment and capital outlay.

Balibago Waterworks Systems serves around 70 000 customers in a rural area of the Philip- pines. The business has grown by reaching out to adjacent towns and villages and asking each community if it would like Balibago to build a network to supply them with piped water. When Balibago does this, it begins by showing the community its regulated schedule of tariffs. The community is then asked whether it wants access to piped water and is prepared to pay the scheduled price for access. Balibago has found that in many cases communities, which might previously have relied on hand pumps and wells, now see this as an attractive proposition. It makes good sense for the company’s investors too.

Source: Adapted from Global Water Intelligence (2010)