The Sustainable Development Goals (SDGs) have set ambitious targets for water and sanitation. Current investment will need to be tripled in order to achieve safe and universal access to water by 2030, while halving the amount of untreated sewage entering bodies of water. However, this is more than a simple funding and investment issue: it is a water governance issue.
Valuing water and sanitation’s role in development
Water is central to sustainable development. Our first priority must be to raise awareness of its value and importance and integrate the issue into social and economic priorities. This need is now increasingly urgent.
Water use increased sixfold over the past ten years and continues to grow at a rate of 1% per year. Aquifer overexploitation, water pollution and water-related risks are causes for concern which are exacerbated by climate change. It is estimated that water scarcity will affect 4.8 billion people by 2050 and floods will become more frequent and severe.
As the High-Level Panel on Water reminds us, water is a fragile, finite and vulnerable resource. Valuing water could involve water pricing initiatives, the addition of opportunity costs for bulk water, payment for environmental services, water funds, among others. In any case, it will require mobilizing the entire global community. Water promotes health, food security, energy production and the preservation of ecosystems. The five principles on valuing water have become more crucial than ever: recognize and understand the various values of water, reconcile these values and build trust, protect water sources (including catchment basins, rivers, aquifers, etc.), educate to raise awareness and empower the public and, finally, invest and innovate.
Water and sanitation at the heart of the SDGs
SDGs must be understood as a whole, integrating social, economic and environmental aspects, with targets that are necessarily connected. Water plays a unique role, systematically connecting all aspects. Many SDGs are dependent on the achievement of water and sanitation objectives, while others have a more symbiotic relationship with water. Failure to achieve the goal of universal access to water and sanitation would mean the world would become incapable of eradicating extreme poverty and inequality. Water and sanitation must be on governments’ lists of priorities in order to reach SDG 6, and in order to reach many of the other sixteen goals.
On a global scale, universal access would require approximately $144 billion per year simply to expand existing infrastructure. Considering replacement needs and needs for infrastructure such as dams, the required investment is much higher. We are beginning to realize that these goals might not be reached, especially in emerging economies, such as in Latin America.
Increased funding requires better water and sanitation governance
Increased funding for the water sector is therefore a decisive factor in reaching the SDGs. Governments, international financial institutions, NGOs and the private sector must work together to implement new funding mechanisms to create synergy. In this regard, public funding has and will be essential in supporting investment, whether from taxes or charges, grants from donors or sovereign loans. The private sector must be included in the equation in order to increase funding. Climate funds and commercial banks provide new opportunities that could play an increasing role in coming years.
Yet increasing funding in the sector requires a favorable environment, solid institutions, coherent operational methods, accountability and actual participation, whether funding comes from taxes, pricing changes or transfers. In short, the water sector must ensure good governance to increase the investments.
Furthermore, even if it increases, Official Development Assistance (ODA) will unfortunately not be sufficient to fund the water sector. Increasing budgetary pressures on governments could limit sovereign loans from multilateral and bilateral development banks. In such circumstances, water operators must not only provide effective services, they must also actively contribute to closing the funding gap: this requires better governance.
Finally, the difference between basic access and safe access can partially be attributed to flaws in governance that affect the sector’s effectiveness. According to the 2019 report from the WHO-UNICEF joint monitoring program, approximately 85 million people do not have basic access to water, but 2.2 billion do not have access to safe drinking water. Similarly, 2 billion people do not have access to basic sanitation, but over half of the world’s population does not have safe access to sanitation.
The water and sanitation sector’s two governance challenges
Water suppliers are now facing two major challenges threatening the sector’s effectiveness and sustainability. The first, which affects small suppliers, is the scale-up of water policy. In Latin America, 40% to 60% of water does not generate income. In urban areas, water pricing is insufficient to cover the operating and maintenance costs, there are limited opportunities for expanding the services or planning for new infrastructure, and the small suppliers have little access to the latest technology, innovations and information systems. As a result, water supply is intermittent, water pressure is low and is of poor quality.
The second aspect affects corporate governance. Political interference affects all suppliers, particularly the smallest. There have been several attempts to depoliticize water services, but approaches vary and measures advocating a case-by-case approach do not make things easier. To respond to these challenges, public asset management policies propose separating the roles of standard-setting, coordination and water supply. This would help prevent conflicts of interests, but this type of solution requires a strong political will in order to implement a water governance strategy on multiple levels.
Towards better water and sanitation governance through planning
In addition to these two challenges, another governance problem exists: most emerging countries do not have updated master plans for water and sanitation. Feasibility studies and finalized projects are not enough to expand services to include the population that is not yet covered and rehabilitate existing infrastructure. This slows investment, delays the project management cycle and sometimes results in inadequate projects. Governments must therefore increase planning to ensure faster and more effective investments.
Viable and profitable water projects are crucial in accelerating progress in access to water. NGOs and multilateral development banks must support governments and operators in these efforts. The Development Bank of Latin America (CAF) created a grant facility for preparing projects in order to support countries in performing studies and implementing projects. These actions can no longer be delayed and must increase. The water sector must redouble its efforts to ensure no one is left behind.
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