Organization for Economic Co-operation and Development Water Study Flawed, Shortsighted

"The Organisation for Economic Co-operation and Development's (OECD)'s new report Managing Water for All recycles the same tried and failed market-based solutions to the problem of ensuring, as the UN recognized in 2002, "The human right to water is indispensable for leading a life in human dignity." While the OECD recognizes the dire scope of the problem and the additional climate change risks going forward, the report fails to provide new leadership on these vital questions. The OECD promotes several dubious solutions to the lack of access to drinking water faced by 1 billion people and sanitation services faced by 2.5 billion people.

"First, the OECD overly focuses on household water fee structures when these users represent about a tenth of the water consumption. The OECD report does not even try to address the industrial water use or pollution discharges, although it is about twice household use. Households already pay a disproportionate share - both in fees, tariffs and flat rates compared to industrial and industrial agricultural users, but also in terms of uncollected environmental externality costs from industrial and agricultural pollution and use. The OECD oddly cautions that "exaggerated assessments of [household] affordability constraints that underestimate willingness to pay" can leave water systems underfinanced. But this ignores the broader water equity question of balancing the majority of the system costs on the backs of the thirsty families who can least afford it and use the least water.

"Second, the OECD declares that World Bank-style international lending should be a key pillar to water financing. Expanding the World Bank's failed model will only deliver more misery to the developing world since it is more preoccupied with raising rates than with providing water. As our report, Dried Up, Sold Out: How the World Bank's Push for Private Water Harms the Poor, reveals, the World Bank has slashed funding for water and sanitation, promising private investments would makeup the shortfall. Instead, only 600,000 new water connections have been made in all of sub-Saharan Africa, South Asia and East Asia from private investment -- 99 percent short of the World Bank's goal of getting water and sanitation services to an additional billion people.

"Finally, the OECD report implicitly endorses the World Bank's pro-privatization approach to water service reliance on stringent cost recovery - essentially charging consumers that earn one or two dollars a day more for water. Research shows that private water concession operators hike household water rates to recoup any investment. Indeed, public utilities are the most efficient precisely because they are accountable, transparent and responsive to the public. The OECD applies these market-based incentives for agricultural water use by highlighting water property rights and permit trading systems while largely ignoring the vast consumption and pollution cost of industrial agriculture."