Global costs and benefits of drinking-water supply and sanitation interventions to reach the MDG target and universal coverage, 2012.
Guy Hutton. World Health Organization
The present study aimed to estimate global, regional and country-level costs and benefits of drinking-water supply and sanitation interventions to meet the MDG target in 2015, and to attain universal coverage. These economic data will provide further evidence to support investment in water supply and sanitation systems and services, with a focus on services that are both socially efficient and financially sustainable. The results will help donors and governments of low- and middle-income countries to justify allocation of adequate budgets for such systems and services.
This report updates previous economic analyses conducted by the World Health Organization, using new WSS coverage rates, costs of services, income levels and health indicators. Benefit-cost ratios (BCR) and costs are estimated to meet the MDG drinking water and sanitation target and to attain universal access of basic services.
A large range of economic and social benefits can result from improved WSS services. Reductions in cases and deaths associated with diarrhoeal disease and in indirect adverse health impacts (e.g. through malnutrition), as well as time benefits resulting from the proximity of improved WSS services are expected to account for a large share of total benefits. Economic benefits related to savings from the health improvements of upgraded
WSS services relate to seeking less health care, to reduced losses of productive time due to disease and to a reduction in premature mortality.
The total global economic losses associated with inadequate water supply and sanitation were estimated at US$ 260 billion annually, or 1.5% of Gross Domestic Product of the countries included in this study. The total economic benefits of meeting the MDG target amount to US$ 60 billion annually. The benefits are dominated by sanitation, accounting for US$ 54 billion. The three regions where benefits are greatest are S Asia, E Asia and SSA. Attaining universal sanitation will more than triple the benefits compared with current coverage, to US$ 220 billion annually. Other regions contributing importantly to global benefits for universal access are LAC, SE Asia and W Asia.
The main contributor to overall benefits of sanitation is the value of time savings which accounts for more than 70% of total benefits in all regions, and is as high as 80% to 90% of total benefits in most regions. In SSA and S Asia an important contribution comes from health benefits, especially the value of saved lives. Health care savings – which tend to be financial in nature – vary across regions between 5% and 13% of total benefits. In terms of overall value, the global picture on sanitation benefits is dominated by E Asia and S Asia, with over US$ 30 billion combined benefits. SSA contributes an important saving with US$ 10 billion annually.
