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What are the Costs/Benefits of Global Water and Sanitation Improvements?


Taking Water and Sanitation Coverage for Granted

Every day millions of North Americans freely flush their toilets, liberally run the faucet or relax under the steady stream from a warm shower. To many North Americans these activities are not considered luxuries, but basic functions of everyday life. Yet, for some in Africa or Asia it is a daily struggle to find a single cup of clean water. Nearly 40 percent of Africa has an unsafe water supply and poor sanitation coverage and in Asia, more than half the population is exposed to unsanitary conditions, according to a study conducted in 2000 by the World Health Organization (WHO) and UNICEF. The effects are demonstrable. According to the WHO, water-borne diseases spawned from unsanitary conditions resulted in roughly 1.6 million deaths in 2003, of which 90% were children under five. In addition, roughly 1.1 billion people are without access to safe water sources and 2.4 billion people lack access to improved sanitation. The following table crystallizes this global disparity in access to water supply and sanitation coverage.

Table 1: Water and Sanitation Coverage By Region
Region Coverage (%)
Water Supply Sanitation
Africa 62 60
Asia 81 48
Latin America & Caribbean 85 78
Oceania 88 93
Europe 96 92
North America 100 100

Source: WHO/UNICEF, 2000


In response to these startling statistics, the United Nations Millennium Declaration established goals to halve the proportion of people without sustainable access to both improve water supply and improved sanitation by 2015.

The WHO commissioned the Swiss Tropical Institute (Institute) to conduct a comprehensive cost/benefit analysis of improved access to safe water supply and the subsequent health, economic, education and cultural benefits. The Institute recently completed its report, "Evaluation of the Costs and Benefits of Water and Sanitation Improvements at the Global Level" (to read the complete report, please go to http://www.who.int/water_sanitation_health/wsh0404/en/).

The Institute's findings are clear: Increased access to "improved" water supply and sanitation coverage is directly related to the level of financial investment. The more money invested globally, the greater access to safe drinking water and sanitation coverage for the impoverished. Furthermore, achieving global water supply and sanitation goals would yield quantifiable benefits far exceeding the financial investments required.

What Constitutes "Improved?"

For purposes of their analysis, the authors focused on low technology improvements and defined "improved" water as water supply that involves better access and protected water sources, resulting in a significantly increased probability that water is safe and more accessible. "Improved" sanitation is quantified as better access and safer disposal of excrement. Using the above definition of "improved," WHO identified five intervention goals and their corresponding costs, as outlined in Table 2.

Table 2 Intervention Goals Costs (US$/per annum)
1.) Reducing by half the number of people without sustainable access to improved water supply. $1.78 billion
2.) Reducing by half the number of people without sustainable access to both improved water supply and sanitation. $11.3 billion
3.) Access for all to improved water and sanitation services. $22.6 billion
4.) Household water treatment using chlorine and safe storage would cost an additional $2 billion on top of access for all to improved water and sanitation services. $24.6 billion
5.) Access for all to regulated in-house piped water supply with quality monitoring and in-house sewage connection w/partial treatment of sewage. $136.5 billion


The figures cited above fluctuate greatly depending on the access targets. For example, the table clearly illustrates that a high level of funding is required, $136.5 billion per annum, to secure "access for all to regulated in-house pipe water supply with quality monitoring and in-house sewage connection w/partial treatment of sewage." Yet, the table shows that even a modest investment of $1.78 billion per annum can go a long way towards increasing access to safe water by reducing in half the number of people without sustainable access to improved water supply.

While Intervention Goal 2 requires an additional investment of approximately $10 billion annually, the benefits justify the expense. According to the WHO, Intervention Goal 2 would reduce diarrhea episodes by 10 percent and provide a global economic benefit of $84 billion.

Overall, the WHO believes that "careful consideration of all benefits and all costs of water and sanitation projects will tip the balance in favor of positive investment decisions."

Health Benefits of Safe Water Supply and Sanitation Coverage

While policy decisions are closely tied to their expense, the underlying concern of limited access to safe water supply and sanitation coverage is the incalculable cost of human life. Most prevalent with water-borne diseases is infectious diarrhea. In fact, the WHO found that a reduction in the number of episodes of diarrhea and the resultant reduction in the number of deaths were directly tied to access to safe water supply and sanitation services (Table 3). Clearly, the health impact of "improvements" will vary from region to region.

Table 3: Intervention Goals Global Diarrhea Reduction
Intervention 1 (water only) 4% (episodes)
Intervention 2 10% (episodes)
Intervention 3 16.7% (episodes)
Intervention 4 53% (episodes)
Intervention 5 69% (episodes)


Economic Benefits of Safe Water Supply and Sanitation Coverage

The economic benefits of improved access to a safe water supply and sanitation coverage are extensive. Healthcare constitutes a considerable expense, particularly in nations where access to healthcare is limited. For example, if access to safe water and sanitation coverage were improved there would be a smaller frequency of diarrhea cases. As a result, patients would avoid costs accrued with treatment expenditures, such as care, drugs, transportation and time spent seeking care.

There are four distinct groups that stand to receive direct economic benefits from water and sanitation improvements: the health sector, patients, consumers and agricultural and industrial sectors. Realized direct benefits for these groups include less expenditure on treatment of diarrheal disease, less expenditure on transport in seeking treatment, less time lost due to treatment seeking. While indirect benefits would include the value of less health workers falling sick with diahrrea, avoided days lost at work or at school, avoided time lost of parents/caretakers of sick children and avoided deaths. The total economic benefits of interventions are impossible to ignore (Table 4).

Table 4: Intervention Goals Economic Benefits
(US$ year 2000)
Intervention 1 $18.143 billion
Intervention 2 $84.4 billion
Intervention 3 $262.879 billion
Intervention 4 $344.106 billion
Intervention 5 $555.901 billion


The WHO report validates the premise that "improved" access to safe water supply and sanitation coverage would bear health care related benefits that would significantly reduce global healthcare costs. This analysis concluded that every $1 US invested would yield an economic benefit ranging from $3 to $34 US depending on the region. Further, additional improvements to drinking water quality, "such as point of use disinfection" would portend benefits varying from $5 to $60 US for every $1 US invested.

Conclusion

Water-borne diseases have plagued the global population for centuries. Unfortunately, many people remain exposed to the pathogens that trigger these deadly illnesses. The WHO analysis of this issue is not complex: increased funding to improve access to safe water and sanitation will go a long way towards eradicating this problem. Different intervention strategies have been captured to provide policy makers with guidance. As is generally the case, those who do not have a seat at the decision making table often do not have their voices heard. Clean water and sanitation is not a privilege, it is a right.