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Melanie Nakagawa’s Blog

Investing in Clean Water Brings Economic Benefits and So Much More

Melanie Nakagawa

Posted March 18, 2009

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In the midst of this financial crisis, governments are trying to spend its resources to stimulate the economy.  To many people this has led to questions over how realistic it is to augment a budget for issues such as clean water.  Some may wonder if we can even keep our investments at its current grossly underfunded amount. 

However, according to the past two days of panel discussions and debate at the 5th World Water Forum, now is not the time to cut water funding.  Instead, now is the time to be investing in achieving access to safe water and sanitation because of the multiple benefits clean water provides for our economy and society. 

The economic, public health and community benefits of investing in water are the focus of many discussions in Istanbul.  Experts have addressed what investments in the water and sanitation sector can do to help our economic recovery, poverty alleviation, gender empowerment, child mortality, and serve as a stepping stone to meeting the Millennium Development Goals

In fact, according to the World Health Organization's report Safe Water, Better Health, every $1 invested in water and sanitation can yield economic benefits on average between $7 and $12.  By taking into account the debilitating aspect of water-related diseases, time spent walking miles to get water, child mortality and drop out rates from school (often from girls who lack access to sanitary facilities after reaching puberty), the report highlighted additional benefits from investing in improving access to water and sanitation which include:

  • Health-care savings of US$ 7 billion a year for health agencies and US$ 340 million for individuals;
  • 320 million productive days gained each year in the 15- to 59-year age group, an extra 272 million school attendance days a year, and an added 1.5 billion healthy days for children under the age of 5, together representing productivity gains of US$ 9.9 billion a year; and
  • Time savings resulting from more convenient drinking-water and sanitation services, totaling 20 billion working days a year, giving a productivity payback of some US$ 63 billion a year.

Based on this WHO study, we see a significant payback of US$ 83 billion a year from the US$ 11.3 billion a year investment needed to meet the Millennium Development Goal for water and sanitation.  As many have pointed out in this week's debates, this payback makes a very strong argument in favor of promoting safe water and sanitation in these difficult financial times. 

Thankfully, this news of why we benefit from investing in water has been central to many of the discussions this week.  The recent launch of the OECD Report "Managing Water for All: an OECD Perspective on Pricing and Financing" provides useful analysis for policy makers on how to strengthen financing for water and address the challenges this crisis faces.  Similarly, how some governments are recognizing these benefits in legislation is also being highlighted.  For example, the U.S. and China are two countries that have water resources in their domestic economic stimulus bills.  Specifically, the U.S. has committed $10 billion towards water resources in the recent stimulus: $6 billion allocated to wastewater and $4 billion to drinking water.  There is also a 20% set aside as a green reserve that can be used to fund green infrastructure, water efficiency, energy efficiency, and other environmental innovation.  For more information about the stimulus' provisions on water check out the American Rivers summary

While the U.S. stimulus is a good start for our domestic water resources, we still have a lot further to go in supporting international safe drinking water and sanitation efforts.  Legislation such as the Paul Simon Water for the World Act of 2009 introduced this week by Senator Durbin is a good step.  This new legislation "places water in the forefront of America's development priorities, seeking to reach 100 million people around the world with sustainable access to clean water and sanitation by 2015."  We will also need sufficient appropriations and greater political support for clean water, but the U.S. has an opportunity to take a significant step forward by demonstrating that we are serious about putting together the right tools to tackle the global water and sanitation crisis. 

Therefore, with the right mix of political support plus financial investment in access to safe water and sanitation for those most in need, we have the opportunity to see mulitiple benefits, not only to the economy but for our planet.

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John OldfieldMar 19 2009 05:58 PM


Thank you for a great post. Meeting the MDGs for safe water and sanitation is an important contributor to all of the other MDGs (on average 30%) - child health, maternal health, education, environmental sustainability and so on.

It's great to see NRDC tackling the linkages between safe water and other development challenges including environmental conservation.


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