Academia session: Sarantuyaa Zandaryaa ,UNESCO, 16th January UN Water Zaragoz...
Presentation Hanna Leckie, OECD, 15th January UN Water Zaragoza Conference 2015
1. Implementing the Water SDG
Financing and economic instruments:
Challenges and tools
An OECD perspective
Hannah Leckie
OECD Environment Directorate
2. Outline
Water security as a driver for economic growth
The value of economic instruments
OECD experience with:
• Pricing for WSS
• Financing WRM
• Implementation issues and tools
3. Water security as a driver for growth
• A causal factor in level of economic
development
• Hydrological variability
• 4 water risks
6. The value of economic instruments
• Raise revenues
• Promote efficient uses
• Allocate water where it creates more value
• Value the benefits of water-related services
• Provide incentives to explore low-cost options
• Engage stakeholders
7. Financing WSS services. The role of tariffs
How are tariffs used in OECD countries?
Source: OECD (2010), Pricing water and sanitation services, OECD Publishing, Paris
Water Prices (2008) Water bills as a share of the disposal income of the
lowest decile of the population (2008)
8. Tools to support better use of tariffs
• Benchmarking
• 3T’s
• Strategic financial planning
• Performance-based contracts
• PSP for water supply and sanitation
9. Financing WRM
Financing is required:
• To invest in and operate infrastructures
• To operate institutions
The sector remains underfunded:
• Low price of water for irrigation
• Increasing infrastructure needs
• Degradation of water quality
• …
10. OECD tools to bridge the financing gap
• The OECD Framework for Financing WRM:
1. Polluter Pays
2. Beneficiary Pays
3. Equity
4. Consistency across adjacent policies
• Guidance on Payment for ecosystem services
• Reform of environmentally harmful subsidies
11. Key messages
• Economic instruments are essential for
achieving the SDG on water
• There are implementation issues
• Robust economic analysis is required to:
• document costs and revenue
• establish facts to move policy dialogues
further.
