S2 Economics of Sanitation by Edkarl Galing

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Economics of Sanitation for InformedDecision Making

Prime Rodriguez and Karl Galing

WATER AND SANITATION PROGRAM

ADB Headquarters, Manila, 23 May 2011



Study Rationale

Overall Goal: To advocate for increased investments, efficient

planning and implementation of sustainable sanitation and hygieneoptions.

Components:

1. Impact Study: Analyze economic impacts

of current sanitation arrangements &hygiene practices; and estimate potentialgains from improvements

based on analysis of secondary data

2. Options Study: Analyze costs and benefits

of different sanitation options to informpolicies and programs

based on primary surveys



Impact Study Results – Southeast Asia

0

1

2

3

4

5

6

7

8

Cambodia Lao PDR Indonesia Philippines Vietnam

Health Water Environment User preferences Tourism

US$ 9 billionPer capita US$ 22



Impact Study Results – India

Health71.7%

Water7.8%

Access Time20%

Tourism0.5%

0%

10%

20%

30%

40%

50%

60%

70%

80%

P e r c e n t o f T o t

a l

Share across impact categories

US$ 53.8 billionPer capita US$ 48



Emerging Options Study Results

Preliminary results from:Cambodia, Indonesia,Philippines, Vietnam andYunnan Province (China)



Field-level cost benefit analysis,comparing technologies and programapproaches

Close to 40 field sites: 20 rural, 18urban, with sample of over 5,000households

Monetized benefits focusing onhealth, water and access time

Comparing optimal versus actual

program

Intangible benefits assessed

Study Features



Sanitation Options Have a Positive Return

-

1

2

3

45

6

7

8

9

10

U r b a n S i t e s

B e n e f i t - C o s t R a

t i o

-

1

2

3

4

5

67

8

9

10

R u r a l S i t e

s

B e n e f i t - C o s t R a t i o



Some Technologies Perform Better than Others…

0

1

2

3

4

Dry pit (CLTS) Dry pit (long-lasting) Wet pit 1 Wet pit 2

B e n e f i t - C o s t

R a t i o

Access time

Water treatment

Water access

Health mortality

Health productivity

Health care

Cambodia - rural

1

3

8

8

Life spanWet pit outperforms dry pit



…but Relative Performance Varies Among Countries

Indonesia - rural

Dry pit outperforms wet pit

0

1

2

3

4

5

6

7

8

Public Shared Dry pit Wet pit Septic / WWM

B e n e f i t - C o s t R

a t i o

Access time

Water treatment

Water access

Health mortality

Health productivity

Health care



Higher Ladder Options – Higher Benefits…

Yunnan (China) - rural

0

50

100

150

200

250

300

Pit latrine UDDT Septic tank

A n

n u a l e c o n o m i c b

e n e f i t

p e r h o u s e h o l d

Reuse

Access time

Water access

Health mortality

Health productivity

Health care



…but at What Cost?

Yunnan -rural

Philippines -rural

0

10

20

30

40

50

60

70

Shared Pit UDDT Biogas Septic tank

US$(2009) Annualized Cost - Rural Sites

Program Maintenance Operation Investment

0

20

40

6080

100

120

140

Dry pit EcoSan Septic tank Septic tank with STF

US$(2009) Annualized Cost - Rural Sites

Investment Operation Maintenance



Impact on Resources/Environment Undervalued

With and without wastewater management

0

1

2

3

4

5

6

Wet pit Septic

WWM

Septic Septic

WWM

Septic Septic

WWM

Wet pit Septic

WWM

Indonesia Philippines Vietnam China (Yunnan)

Access time

Water treatment

Water access

Health mortality

Health productivityHealth care

If environmental benefits are not monetized, the cost-benefit performance of WWM is lower than other options



Use What is There More Efficiently

Percentage loss in efficiency under actual

program conditions

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%



Yunnan: Average satisfaction with current toilet option

Don’t Forget Non-Quantified Benefits!

0

0.5

1

1.5

2

2.5

3

3.5

4

T o i l e t p o s i t i o n

C l e a n l i n e s s

S t a t u s

V i s i t o r s

M a i n t a i n i n

g

H e a l t h

C o n f l i c t a v o i d a n c e

C o n v e n i e n c e f o r c h i l d r e n

C o n v e n i e n c e f o r e l d e r l y

N i g h t u s e o f t o i l e t

A v o i d r a i n

S h o w e r i n g

D a n g e r o u s a n i m a l s

Improved

Unimproved



• Sanitation is a socially profitable investment

• Economic performance varies substantially betweentechnology 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 indecision making

Key Messages



AcknowledgementsWith special thanks to funding agencies, staff of WSP andconsultant 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

Documents

S2 Economics of Sanitation by Edkarl Galing