Impact of efficiency on affordability: A study of the Brazilian new water loss goals

Abstract

Infrastructure service affordability has become a burgeoning concern over the past years due to the recent economic crisis and the growing role of tariffs in funding the services. Pressure on utilities to promote social assistance programs in addition to an efficient service has risen toward providing water as affordable as possible. This study shows the positive impact of efficient services on families' water affordability by analyzing the new Brazilian water loss goals and the potential effect of water loss reduction on total expenses reported in the Brazilian utilities' National Water and Sanitation Information System. The total service cost for water and sanitation (before and after the aforementioned goals) was then translated to average tariff per cubic meter and affordability ratios. The potential water volume saved in physical losses can reach up to 16.6% of the water consumed in the country, and although the impact on water affordability was timid, the positive results indicate utilities have an important role in assuring water and sanitation for all, and regulators must be involved toward taking a deep look at local conditions. HIGHLIGHTS Efficient utilities have an important role on water affordability.; The new Brazilian water loss goals have potential positive outcomes for families’ budget.; Several Brazilian utilities may not achieve financial savings due to nonrevenue water programs costs.;

Keywords

• affordability
• public policy
• regulation
• tariff
• water access
• water loss