WASH 2011 conference: Almud Weitz, Water and Sanitation Program

1. Economics of Sanitation for Informed
Decision Making
Almud Weitz
WATER AND SANITATION PROGRAM
Brisbane, May 2011

2. Study Rationale
Overall Goal: To advocate for increased investments, efficient
planning and implementation of sustainable sanitation and hygiene
options.
Components:
1. Impact Study: Analyze economic impacts
of current sanitation arrangements &
hygiene practices; and estimate potential
gains from improvements
based on analysis of secondary data
2. Options Study: Analyze costs and benefits
of different sanitation options to inform
policies and programs
based on primary surveys

3. Impact Study Results – Southeast Asia
Health Water Environment User preferences Tourism
8
7
US$ 9 billion
6
Per capita US$ 22
5
4
3
2
1
0
Cambodia Lao PDR Indonesia Philippines Vietnam

4. Impact Study Results – India
Share across impact categories
80% Health
71.7%
70%
US$ 53.8 billion
60%
Per capita US$ 48
Percent of Total
50%
40%
30%
Access Time
20%
20%
Water
10% 7.8%
Tourism
0.5%
0%

5. Emerging Options Study Results
Preliminary results from:
Cambodia, Indonesia,
Philippines, Vietnam and
Yunnan Province (China)

6. Study Features
Field-level cost benefit analysis,
comparing technologies and program
approaches
Close to 40 field sites: 20 rural, 18
urban, with sample of over 5,000
households
Monetized benefits focusing on
health, water and access time
Comparing optimal versus actual
program
Intangible benefits assessed

7. Sanitation Options Have a Positive Return
10
9
Benefit-Cost Ratio
8
Rural Sites
7
6
5
4
3
2
1
-
10
9
8
7
Benefit-Cost Ratio
6
5
Urban Sites
4
3
2
1
-

8. Some Technologies Perform Better than Others…
Cambodia - rural
Access time
4
Water treatment
Water access
8 Health mortality
3 Health productivity
8
Benefit-Cost Ratio
Health care
3
2
1
1
0
Dry pit (CLTS) Dry pit (long-lasting) Wet pit 1 Wet pit 2
Life span
Wet pit outperforms dry pit

9. …but Relative Performance Varies Among Countries
Indonesia - rural
8
7
6
Benefit-Cost Ratio
5
Access time
4
Water treatment
3 Water access
2 Health mortality
Health productivity
1
Health care
0
Public Shared Dry pit Wet pit Septic / WWM
Dry pit outperforms wet pit

10. Higher Ladder Options – Higher Benefits…
Yunnan (China) - rural
300
250
Annual economic benefit
200
per household
150
Reuse
Access time
100
Water access
Health mortality
50
Health productivity
Health care
0
Pit latrine UDDT Septic tank

11. …but at What Cost?
US$
(2009) Annualized Cost - Rural Sites
70
60
50
40
30
Yunnan - 20
rural 10
0
Shared Pit UDDT Biogas Septic tank
Program Maintenance Operation Investment
US$
(2009) Annualized Cost - Rural Sites
140
120
100
Philippines - 80
rural 60
40
20
0
Dry pit EcoSan Septic tank Septic tank with STF
Investment Operation Maintenance

12. Impact on Resources/Environment Undervalued
With and without wastewater management
6
5
4
3
2
1
Access time
Water treatment
0 Water access
Wet pit Septic Septic Septic Septic Septic Wet pit Septic Health mortality
WWM WWM WWM WWM Health productivity
Health care
Indonesia Philippines Vietnam China (Yunnan)
If environmental benefits are not monetized, the cost-
benefit performance of WWM is lower than other options

13. Use What is There More Efficiently
Percentage loss in efficiency under actual
program conditions
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%

14. To
i le
tp
os
0.5
1.5
2.5
3.5
0
1
2
3
4
Cl it
ea ion
nl
in
es
s
St
at
Vi us
M sit
ai or
nt s
ai
Co Co ni
n v n fl ng
en ict He
Co ien a vo alth
n v c e id a
en for nc
ie
nc c h i e
l
Ni e fo dre
gh r n
t u e ld
s e er
of ly
t
Av oile
oi t
Da d
ng Sh rain
e r ow
Don’t Forget Non-Quantified Benefits!
ou e
s a r in
ni g
m
al
s
Yunnan: Average satisfaction with current toilet option
Improved
Unimproved

15. Key Messages
• Sanitation is a socially profitable investment
• Economic performance varies substantially between
technology options
• You can’t copy and paste – significant inter-country
differences of costs and benefits
• Choices must be made on level of benefits required - higher
benefits usually cost more
• Use what is there better - optimal versus actual economic
performance
• Non-quantified and environmental benefits of sanitation
require better understanding as they are crucial to consider in
decision making

16. Acknowledgements
With special thanks to funding agencies, staff of WSP and
consultant teams and their institutes:
- Study lead: Guy Hutton, WSP
- Cambodia: Sok Heng Sam, EIC
- Indonesia: Asep Winara, MLD
- Philippines: U-Primo Rodriguez, UP
- Vietnam: Viet Anh Nguyen, IESE
- Yunnan: Liang Chuan, YASS