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Benefits of Investing in Water and Sanitation

An OECD Perspective

image of Benefits of Investing in Water and Sanitation

The provision of water supply, sanitation and wastewater services generates substantial benefits for public health, the economy and the environment. Benefit-to-cost ratios can be as high as 7 to 1 for basic water and sanitation services in developing countries.

Wastewater treatment interventions, for example, generate significant benefits for public health, the environment and for certain economic sectors such as fisheries, tourism and property markets.

The full magnitude of the benefits of water services is seldom considered for a number of reasons, including the difficulty in quantifying important non-economic benefits such as non-use values, dignity, social status, cleanliness and overall well-being. Also, information about the benefits of water services is usually hidden in the technical literature, where it remains invisible to key decision-makers in ministries.

This report draws together and summarises existing information on the benefits of water and sanitation.

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Executive Summary

The provision of water supply, sanitation and wastewater services generates substantial benefits for public health, the economy and the environment. Benefits from the provision of basic water supply and sanitation services such as those implied by the Millennium Development Goals are massive and far outstrip costs. Benefit-to-cost ratios have been reported to be as high as 7 to 1 for basic water and sanitation services in developing countries. Wastewater treatment interventions can generate significant benefits for public health, the environment and for certain economic sectors such as fisheries, tourism and property markets, although these benefits may be less obvious to individuals and more difficult to assess in monetary terms. Finally, protecting water resources from pollution and managing water supply and demand in a sustainable manner can deliver clear and sizeable benefits for both investors in the services and end water users. Investments in managing water resources are going to be increasingly needed in the context of increasing water scarcity at the global level. The full magnitude of the benefits of water services is seldom considered for a number of reasons. Non-economic benefits that are difficult to quantify but that are of high value to the concerned individuals and society, i.e. non-use values, dignity, social status, cleanliness and overall well-being are frequently under-estimated. In addition, benefit values are highly location-specific (depending on the prevalence of water-related diseases or the condition of receiving water bodies, for example) and cannot be easily aggregated.

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