Water supply, sanitation, and environmental sustainability : the financing challenge

This booklet is an adaptation of the keynote address to the Ministerial Conference "Drinking Water and Environmental Sanitation : Implementing Agenda 21", held in Noordwijk, The Netherlands, March 22, 1994. It differentiates between the "old agenda" of providing safe household water and sanitation services to large numbers of people and a "new agenda" that requires sustainable, environmentally sensitive use of water resources. It outlines the challenge for developing countries of attending to this new agenda while still completing the old one. The booklet presents a new approach to financing which views water as an economic good and advocates a participatory approach to resource management in an institutional framework with roles for government, private sector and NGOs. The central element of the plan is the use of market-line instruments at all levels: reliance on user charges to raise revenue, on the private sector to provide the services, and on the use of abstraction charges, pollution charges and water markets for water resources management. It also emphasizes the role of the World Bank and other agencies to help provide environmentally sustainable water and sanitation services to growing populations. Case studies describe promising intiatives to improve sanitation services in Pakistan and Brazil. Tables and charts illustrate the cost of supplying water, the degree of cost recovery in developing countries, the costs of different types of sewage treatment, and public investment in infrastructure.