A proper account of economic and social aspects of water use require hygienic standartisation of water (drinking water, in particular) supplied by water treatment companies to consumers, as well as waste water. Economic aspects are linked to identifying efficient mechanisms for funding water supply and sanitation companies, having in mind that they operate in a variety of contexts and conditions even within one country, not to mention different BRICS countries. The variety of funding mechanisms is wide and range from “full” market self-sufficiency, limited only by the abovementioned standards, to complete dependence on government or municipal budgets (specific funding arrangements depend on the form of ownership).
Regardless of the funding source, the issue of tariffs for the water sector’s services remains and becomes especially acute with lowering population’s wellbeing and tough economic situation of corporate water consumers. High drinking water tariffs lead to social tension; low tariffs negatively affect water quality and water supply’s reliability, and limit water treatment companies’ development plans, including technological modernisation. In a volatile economic situation public funding is unreliable and the easiest way to address this situation is establishing specialised public water funds (there are numerous tools and forms for channelling funds into them).
Market pricing of water sector’s services doesn’t always provides satisfactory outcomes. In most cases the best solution is direct or indirect government regulation of tariffs. This support could be to programmes assuring water supply to the population either through subsidising the costs of water supply companies or to the population. There are multiple tools for this (personalised tariffs, paying health compensations, subsidising personal water purification costs, providing targeted support to low-income groups, etc.) and each has its strengths and weaknesses. Short- and especially long-term consequences the choice of funding tools for water supply and sanitation are a topic for scientific discussions. However, creating a market for polluted waste water discharge allowances seems to be a sensible solution under any circumstances.
At this stage we suggest adopting the 'best available technology' principle in wetting the payments for negative impact on water objects. However should keep in mind that it is based on technological (as opposed to environmental) approach to impact regulation, and is a way to legitimise waste water discharges without taking into account a possible breach of quality standards for natural waters.
Session Program: BRICS Water Forum_Session 3 Programme (PDF, 364 Kb)
Session Chair: Elena V. Dovlatova, Executive Director, Russian Water and Wastewater Association (RAWW)