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Addressing the social consequences of tariffs for water supply and sanitation

Author

Listed:
  • Xavier Leflaive

    (OECD)

  • Marit Hjort

    (OECD)

Abstract

Where they exist, tariffs for water supply and sanitation services face a tension between different policy objectives, such as ensuring the financial sustainability of service provision and ensuring access to all, including vulnerable and poor social groups. Governments (local and national) resort to a range of measures to reconcile these objectives and address social consequences of tariffs: tariff levels and structures, nudging, budgetary transfers, targeted social measures. The paper revisits most common practices and discusses their pros and cons, and requisites to make them work. It provides up-to-date analyses on a series of related issues, such as definitions of affordability, principle for cost recovery, benefits and costs of metering, elasticity of domestic water use to prices, fiscal transfers to water services. The paper is informed by recent academic research, data on selected countries, and interactions with OECD bodies.

Suggested Citation

  • Xavier Leflaive & Marit Hjort, 2020. "Addressing the social consequences of tariffs for water supply and sanitation," OECD Environment Working Papers 166, OECD Publishing.
    • Handle: RePEc:oec:envaaa:166-en
    DOI: 10.1787/afede7d6-en
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    Cited by:

    1. Martins, Rita & Quintal, Carlota & Teotónio, Carla & Antunes, Micaela, 2023. "Water affordability across and within European countries: a microdata analysis," Utilities Policy, Elsevier, vol. 83(C).
    2. Teotónio, C. & Martins, R. & Antunes, M. & Quintal, C., 2023. "Unveiling underconsumption of water and electricity services at the bottom of the income distribution," Utilities Policy, Elsevier, vol. 82(C).

    More about this item

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • H4 - Public Economics - - Publicly Provided Goods
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • L95 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Gas Utilities; Pipelines; Water Utilities
    • L98 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Government Policy
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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