OECD Studies on Water

2224-5081 (online)
2224-5073 (print)
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Water is essential for economic growth, human health, and the environment. Yet governments around the world face significant challenges in managing their water resources effectively. The problems are multiple and complex: billions of people are still without access to safe water and adequate sanitation; competition for water is increasing among the different uses and users; and major investment is required to maintain and improve water infrastructure in OECD and non-OECD countries. This OECD series on water provides policy analysis and guidance on the economic, financial and governance aspects of water resources management. These aspects generally lie at the heart of the water problem and hold the key to unlocking the policy puzzle.

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Pricing Water Resources and Water and Sanitation Services

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15 Mar 2010
9789264083608 (PDF) ;9789264083462(print)

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In both OECD and non-OECD countries the water sector is facing the challenges of increased competition for water resources, deteriorating water quality, and the effects of climate change and poor management. In this context, how can countries ensure access to adequate, sustainable and affordable water and sanitation services for all?  

Pricing water-related services is an essential part of the answer. This report compiles reliable and comparable data on pricing water and on water supply and sanitation services across OECD countries. It sheds additional light on such policy issues as the choice of tariff structures for water services, cost recovery for water services and affordability.

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  • Acronyms
  • Executive summary

    This report updates two previous reviews of OECD countries’ experience with pricing for water-related services. It is based on the OECD 2007-08 Survey which was set up to address two sets of policy questions:

    • What proportion of costs is recovered by revenues from tariffs? What alternative cost-sharing mechanisms may be appropriate for different water-related activities?

    • Are average tariff levels affordable for all? And if not, are adequate tariff structures, including social tariffs, or other income-support mechanisms being adopted?

  • Introduction
    This report updates two previous reviews of the experience of OECD countries with pricing for water-related services and with the social aspects of tariffs for water supply and sanitation (see OECD 1999, 2003). It expands the geographical scope of the previous reports by including a discussion of tariffs for water supply and sanitation (WSS) in non-OECD countries. New data collected for non-OECD countries is less comprehensive than for OECD countries; it was coupled with a number of case studies.
  • Why water pricing is an issue
    This chapter clarifies the multiple roles of water pricing and situates pricing among other financing mechanisms for water-related services. It identifies two policy questions which will organise the analyses in the report: What proportion of the costs of water-related services is recovered by revenues from tariffs? Are tariff structures adequate and accompanied by social mechanisms?
  • Water pricing in OECD countries: state of play

    This chapter provides a set of robust and comparable data on water prices in selected OECD countries. It covers abstraction charges, pollution charges, pricing water supply and sanitation for households and industrial users (including connection charges).

    The data show that, generally speaking, efforts are being made in OECD countries to better reflect the costs and externalities related to water use by households and industrial users. This is reflected in the deployment of abstraction and pollution charges, in the level of prices (which have increased, at times substantially, over the last decade) and in the structure of tariffs (which better reflect consumption and treatment costs).

  • Policy challenges related to water pricing
    This chapter focuses on two objectives of pricing for water supply and sanitation services: the financial sustainability of services, and the affordability of water bills. It shares data on cost-coverage ratio for domestic water supply and sanitation services and on the share of disposable income allocated to water bills in OECD countries. Data indicate that affordability can be an issue for segments of the population.
  • Annex A. Taxes and levies in household water bills
  • Annex B. Additional sources of information per country
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