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Water and the Fight Against Poverty

Ladies and gentlemen,

People who live without access to clean water, or who have no access to adequate sanitation, are, almost invariably, the poor.

They are caught in a vicious circle. Their poverty denies them the basic necessities of clean water and basic sanitation. And their lack of these necessities condemns them to continued poverty.

Poor people pay vastly more—between ten and a hundred times more—for water and sanitation services than their wealthy neighbours. More than farmers, more than industrialists, more than you and I.

Not only do the poor pay more in financial terms. They also pay more in terms of physical effort—whether it be queuing at a standpipe in a city slum, or walking for kilometres to collect water from a rural well or stream. That cost is usually borne by women, who could be more profitably employed, or children, who should be in school.

The poor also pay an enormous price in health. It is estimated that 80 per cent of illness and death in the developing world is water related. Half the world’s hospital beds are occupied by people with water-related diseases.

Lack of clean water or adequate sanitation kills 1.7 million people a year. Ninety per cent of them are children. Infant mortality in low-income countries is over 13 times higher than in wealthier countries

These statistics represent major roadblocks on the path to sustainable development.

So, ladies and gentlemen, it is plain that any poverty reduction strategy has to address water issues.

This reality has been increasingly recognised by the international community:

• at the 1992 Rio Earth Summit,

• at the 2002 World Summit on Sustainable Development,

• in the Millennium Development Goals, and

• at three World Water Forums, the most recent of which concluded only weeks ago.

At last year’s World Summit in Johannesburg, a commitment was made to halve, by 2015, the proportion of people living without adequate sanitation. And also to halve, by the year 2015, the proportion of people without access to safe drinking water—which is a reaffirmation of the Millennium Development Goal.

These targets are vital in and of themselves, but are also crucial if we are to meet the other WSSD and Millennium Development Goals, including reducing child mortality, combating malaria, eradicating extreme poverty and hunger, empowering women, and improving the lives of slum dwellers.

Ladies and gentlemen,

Water scarcity—because of pollution or declining supply, or a combination of the two—is a threat to sustainable development.

UNEP offers a number of tools—including assessments, policy options, technology transfer and capacity building—to address water and sanitation issues and the global decline in freshwater quantity and quality

At the heart of UNEP’s water strategy is the principle of a fair share of water—for all users and for all uses, including for the environment, which we must always remember is not a competitor for water resources, it is the resource itself.

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In order to achieve sustainable use and equitable distribution of water resources, three things are necessary:

1. Good governance,

2. Good science, and

3. Good management.

Each of these themes is closely interwoven. Each could occupy hours of discussion.

I would like to comment today on some of the issues that I think need to be addressed and some of the potential solutions on offer.

Good governance is perhaps the most important requirement for solving problems of freshwater and sanitation. Governance includes policy, institutional structures and decision making processes. An essential requirement is political will.

Governance is a particularly important and complex issue with respect to shared water resources.

Examples such as the Southern African Development Community’s shared waters protocol and associated joint river basin programmes, which improve the development and management of water resources, can help reduce poverty by promoting development and acting as a catalyst for peace.

The UNEP Atlas of Freshwater Agreements shows how the issue of shared water resources is generally a spur to cooperation rather than conflict. However, the potential for conflict remains.

The implementation of existing regional and international agreements, including the United Nations Convention on the Non-Navigational Uses of International Water Courses is vital.

Increasingly important is the negotiation of agreements on rivers where none exist. Such agreements make the integrated management of river basins easier to achieve.

Integrated river basin and ecosystem management improves environmental services, and the lives and livelihoods of the people who depend on those systems. It is essential for the sustainability of water resources and all the services they provide.

Crucially important is the maintenance of upstream habitats—especially forests—riparian zones, wetlands, floodplains and estuaries.

Another essential component of the good governance package is community participation.

Water security is found where the whole community—including the poor and the marginal—has some control over water resources and services.

Poor people and communities—especially women—need to be consulted about the most appropriate solutions to their needs (instead of having unsustainable higher-tech solutions thrust upon them which they can’t maintain because they either don’t have the know-how or can’t afford the spare parts).

UN-HABITAT’S report Water and Sanitation in the World’s Cities includes many examples of successful partnerships between local authorities, the private sector and community-based groups.

However, major investors are still rarely interested in investing in small-scale projects at neighbourhood level.

The amount of aid currently allocated to low-cost water and sanitation programmes is abysmally low. The OECD’s Development Assistance Committee reported in 2000 that only 1.7 per cent of all sector-allocable aid is earmarked for this purpose. Most of the money available for development is for large-scale projects of $100 million or more.

Yet, for instance, perhaps the most cost-effective investment for public health—and therefore for poverty alleviation—is simple education in basic hygiene practices. This reduces mortality more than just the provision of safe water or sanitation alone.

Ladies and gentlemen,

If current water and sanitation commitments are going to be attained, investment—both at the macro and the micro level—will have to significantly increase to as much as double current levels of investment.

The Water Supply and Sanitation Collaborative Council and the Global Water Partnership have estimated that meeting the Millennium Development Goals on water coverage could require between $14 and $30 billion dollars a year on top of the roughly $30 billion dollars already being spent.

However, the dividends should be vastly greater. For example, a cholera epidemic in 1991 cost the Peruvian economy $1 billion dollars in combined emergency health expenditures and lost revenue from exports and tourism. This figure is more than four times what Peru spent on water supply and sewerage between 1981 and 1988.

There are a number of ways of financing the investments needed in improving water and sanitation services—international and bilateral funding, debt relief, privatisation schemes, community-level resource mobilisation, and so on. What is important is that investment solutions must benefit developing countries in the long-term, address the needs of the poor and be consistent with the environmentally sustainable management of water resources.

In particular, there must be coordination between donors. Therefore, the development of national water strategies by developing countries, and the importance they give to them in their national development plans, are crucially important. This is an area where UNEP can provide expert advice.

At the grassroots level, it is imperative that financial institutions open their doors to communities to enable them to implement water, sanitation and hygiene projects. The work of micro-credit banks, and an initiative UNEP has in southern India for buying down the cost of investing in renewable energy technology, for instance, are interesting templates for this approach.

Finally, a few words about privatisation. Selling water utilities and contracting out water revenue collection have advantages—such as improvements in service delivery, improved revenue collection and financing for expansion.

But there are also disadvantages. Developing country utilities sold in a poor management and financial state are worth much less than if their management is efficient and they are in a good financial state.

Furthermore, privatised or commercialised utilities require regulation. Sophisticated regulatory authorities to monitor privatised water utilities do not exist in most developing countries.

A suggested preferred approach for donor support is to help improve the management of developing country water utilities. Improved revenue streams can then finance service delivery and infrastructure improvements, enhance the environmental sustainability of water supply and use, and improve the deliver of clean water and sanitation to the poor.

Ladies and gentlemen,

I mentioned that the sustainable use and equitable distribution of water resources, depends on three things: Good governance, good science, and good management.

We are fortunate that there is a lot of good science available to support management and policy decisions.

We are less fortunate that it is not always used.

Many conferences have been held over the years on freshwater issues. Similar conclusions are reached and similar solutions proposed. The tools are available, the technologies have been developed or are in development. But the problems are worsening—in our ever-expanding cities, in rural areas, in rivers, lakes and groundwater aquifers.

We need to focus on getting existing tools, techniques and technologies implemented. We need to focus on what works.

We need to particularly address the issue of the wasteful and unsustainable use of water in agriculture, which commands the lion’s share of available freshwater resources—over 70 per cent globally—and which in many cases wastes 60 per cent or more of the water it uses. Agriculture’s profligate use is leading not only to water scarcity in many areas, but to salinisation, soil degradation and desertification—all major contributors to poverty and obstacles to sustainable development.

We also need to address the issue of the waste of water in urban areas. For example, in African cities, up to 50 per cent of the population—the poorest, of course—lack adequate water supplies, and 60 per cent lack adequate sanitation. The figures are similar for urban Asia. Yet, up to 50 per cent of the water supply is wasted through leakage or is otherwise unaccounted for.

The technology already exists to remedy many of these problems. The transfer of appropriate technology is vital.

UNEP’s International Environmental Technology Centre in Osaka, Japan, is compiling a database of water-saving tips, technologies and policies drawn from both the developed and developing world. Examples range from technologies such as drip irrigation, which can reduce water consumption by as much as 60 percent, to rainwater harvesting, dual supply systems (in coastal areas), and dual flush lavatories.

However, as I stated, we do not lack solutions, only the will to implement them.

Ladies and gentlemen,

The key reason why so many people lack access to clean water and sanitation and why water is used in an environmentally unsustainable manner is the lack of integrated water resources management capacity.

Most water crises in the world today are caused by poor water management.

This recognition is long-standing.

For example, forty years ago the Berlin Conference on Water Development in Less Developed Areas found that "the main problems in the field are not technical, but are of an organisational, administrative, political or managerial nature."

Despite this recognition, attempts to address water management and policy issues are inadequate.

The international community and national governments share responsibility for this. More emphasis must be placed on capacity development for management, institutional reform and governance reform.

Perhaps the most important management issue regarding water and sanitation, the one that could have the most benefit for the poor, yet one that is proving to be most controversial, is the issue of water pricing.

It is plain to anyone working in the development or environmental field that the sustainable use and management of water resources demands that users must pay the true costs of the services they receive, with the proviso that the poor majority receive a basic needs supply at a price they can afford.

Currently agriculture’s use is heavily subsidised, while the poor pay too much—financially and in terms of health and labour.

The over-use of water resources can be curbed by demand management approaches that include improved irrigation practices, less-water-consuming crops (especially in water-scarce areas) and more efficient industrial processes. Weighted pricing structures, and the withdrawal of perverse subsidies, can encourage all these things—without harming the poor.

Consider, for a minute, the costs of subsidising water to larger users.

When water is subsidised it tends to be wasted. Subsidies impose a direct cost on taxpayers and an indirect cost through encouraging inefficient water use. The funds used for subsidising water might be better used by society for other purposes—for instance, providing better services to the poor.

Another type of subsidy is when people pollute water and do not pay. This transfers the costs of pollution to other users. In some cases these costs are enormous—to the economy, to human health, and to the environment.

The people who pay the highest price are, again, usually the poor. It is they who have to live closest to polluting industries, and they who have to use untreated, polluted water because they do not have access to the clean piped water that so many of us take for granted.

Recent developments in international law related to the polluter pays principle—such as the United Nations Economic Commission for Europe Joint Protocol on Liability and Compensation and the draft Environmental Liability Directive passed by the European Parliament last month—provide a solid foundation for further development of this essential tool for protecting the environment and the poor.

But, if everyone has to pay the true cost of water, how do we supply the poor? Despite the fact that the poor already pay a disproportionately high price—if they have the money—for water and sanitation services, and despite the fact that studies show that the poor are willing, when they can, to pay for what they know is the single most important necessity, there are problems—both moral and practical—in trying to make the poor pay.

The answer, I propose, to the sustainable and equitable management of water resources is progressive pricing.

Progressive pricing means charging more per unit the more water is used.

A basic needs amount of water should be sold at a low price, subsidised if necessary, so that poor people can afford the minimum needed for a healthy existence.

Increasing levels of consumption are charged for at progressively higher tariffs per unit.

This provides an incentive for more efficient water use. The money saved on infrastructure investment and wasted water can then be re-invested into supporting the uptake of water-efficient technology by larger users, thus alleviating the perceived financial burden of paying for the true cost of the resource—a win-win situation for the poor, for industry and agriculture, and for the environment.

Ladies and gentlemen,

In conclusion, let me recap briefly on the topic of water and the fight against poverty.

It is a complex and controversial issue that needs creative thinking and cooperation among all sectors of society.

At the core of the solution lie three principles: Good governance, good science and good management.

We need to manage our water resources wisely, using integrated management principles based, where appropriate, on international cooperation.

We need to meaningfully involve those without adequate water supply and sanitation in planning and decision-making, and increase financing for all water and sanitation supply solutions.

We need to improve the management of water utilities to generate secure revenue for their improvement.

And we need to reform how water is valued and priced, so that it is not wasted, but treated as the precious, indispensable resource that it is.

Thank you.