Costs and benefits of achieving the MDG target for drinking water and sanitation

Proponents of higher investment in drinking water and sanitation services speak of the multiple benefits this is likely to bring. Disease prevention, fewer child deaths, social and human development, poverty alleviation, gender equity, productivity gains and environmental improvement are all cited as justification for spending more money on drinking water and sanitation improvements.

A study published by WHO in 2004 assessed the costs and benefits of meeting the MDG target on drinking water and sanitation, and compared them with four other investment options, including the ultimate achievement of piped water and sewerage for all. This analysis was based on epidemiological, demographic and economic data from global sources. The study also indicates that even costly interventions result in a high benefit/cost ratio.

Improved water and sanitation facilities, and better hygiene behaviour, will radically reduce illness. In addition, greater access to improved water and sanitation services may confer many other benefits. These include averted health-related costs, avoidance of time lost from daily activities as a result of illness, and time saved by having water and sanitation facilities closer to home. Time saved may translate into higher productivity, higher school attendance and more leisure time. All these benefits would have economic and social impacts, both immediate and future.

The costs of achieving these benefits would vary considerably, depending on the level of water and sanitation services chosen. The costs should take into account all resources required to put in place and maintain the interventions. These are divided into investment and recurrent costs. Initial investment costs include planning and supervision, and hardware construction. Recurrent costs are those concerning operation and maintenance of water and sanitation systems, including maintenance of hardware and replacement of parts, emptying of septic tanks and latrines, ongoing protection and monitoring of water sources, water and wastewater treatment, water distribution and wastewater collection, regulation and control of water and sanitation systems, and continuing educational activities. Each activity could be financed through a number of different sources, public and private, internal and external, depending on the country context and which intervention is being considered.

The study found that achieving the MDG drinking water and sanitation target would produce substantial economic benefits; each US$ 1 invested would yield an economic return of between US$ 3 and US$ 34, depending on the region. Globally, the cost of achieving the MDG drinking water and sanitation target is estimated at US$ 11.3 billion a year. The benefits would include an average global reduction of diarrheal episodes of around 10%.The health related costs avoided would reach US$ 7.3 billion per year worldwide in 2015 if the MDG drinking water and sanitation target is achieved. The annual global value of adult working days gained – on the assumption that time saved is converted into income earned at the minimum wage rate in each country –would amount to almost US$ 750 million if the target is met.

According to the study’s calculations, one of the major benefits of improving access to water and sanitation derives from the time saving associated with having water and sanitation facilities closer to home. This can be achieved, for example, by relocating well or borehole closer to the user communities, or installing piped water in houses, and reducing distances to latrines. The annual value of these time savings globally would amount to US$ 63.5 billion in2015 if the MDG target is met.

The burden of disease associated with lack of access to safe water supply and inadequate sanitation and hygiene is greatest for children under 5 years of age in developing countries. Accordingly, emphasis should be placed on interventions likely to yield an accelerated affordable and sustainable health gain among this group. The evidence points to household water treatment and safe storage, and to promoting hygiene behaviour to reduce diarrhoeal disease, alongside longer-term upgrading of water and sanitation services. Such approaches are also valid for emergency situations.

A policy shift to include better household water quality management to complement the continuing expansion of coverage and upgrading of services may prove a low-cost and effective health intervention in many developing countries, particularly with some African and South Asian countries likely to remain without improved drinking water and sanitation services for years to come.

-Posted by Kshitiz Shrestha (ENPHO)