the economics of sanitation initiative: an introduction
DESCRIPTION
This PowerPoint was presented by WSP Senior Economist, Sophie Hickling, during AfricaSan 3 (Kigali, Rwanda - 2011) under the "Economics of Sanitation for Advocacy and Decision Making" session. This session introduced the Economics of Sanitation Initiative (ESI) aims, rationale, and methods. A panel of experts from government, donors and other sector specialists in Africa commented on the use of ESI results for sanitation financing; the use of media to influence stakeholders; the mechanisms for adopting ESI results into government decision making; and critical assessment and proposed improvement to ESI methods.TRANSCRIPT
The Economics of Sanitation Initiative:
An Introduction
Guy Hutton
Senior Economist, Consultant
Water and Sanitation Program
Motivating factors• Low priority• Lack of evidence
Geographical locations 5 year study Household sanitation focus Study phasing
ESI in Southeast Asia
Overall Goal: Advocate for increased investments, and provide evidence for efficient
planning and implementation of sustainable sanitation services
Study Phases
Phases: 1. Impact Study: Analyze economic impacts
of current sanitation arrangements & hygiene practices; and estimate potential gains from improvementsbased on analysis of secondary data
2. Options Study: Analyze costs and benefits of different sanitation options to inform policies and programs which ones to select
based on primary surveys
Phase 1: Selection of analysis levels– Focus on the National level– Health damage costs by age– Available water quality data– Illustrative case studies, where available
‘Outputs’– Total cost– Cost as % of GDP– Cost per person
Strong inverse relationship between sanitation coverage and economic impacts across 6 Asian countries.
Economic Impacts - % of Gross Domestic Product
PERCENTAGE OF GDP
Cambodia India Lao PDR Indonesia Philippines Vietnam0
1
2
3
4
5
6
7
8
Tourism User preferences Environment Water Health
Considerably larger costs per capita when taking into account differences in purchasing power, compared with prices in the USA.
Economic Impacts - % of Gross Domestic Product
AVERAGE COST PER CAPITA
Cambodia India Lao PDR Indonesia Philippines Vietnam0
20
40
60
80
100
120
140
160
180
200
220International Dollar (ID)* United States Dollar (USD)
Valuation• What is life worth?• Poor sanitation’s contribution to water
degradation and its economic consequences• Valuing tourism development aided by a clean
environment
Economic versus financial cost• Financial = direct and impact on cash
Who incurs the cost?• Part private cost, part externality• Variation between country
Underestimates of damage cost• Conservative estimates• Omitted impacts
Methodological Issues Or…what do the results really mean?
Indonesia Philippines Vietnam Cambodia Lao PDR0
1,000
2,000
3,000
4,000
5,000
6,000
7,000Non-financial Financial
US$ MILLIONS
Dissemination
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