Africa

Financing Drinking Water ​Supply to close Infrastructure Gaps


Jumia Nigeria Mobile Week

“It’s ​possible to ​finance the ​drinking water ​supply in the ​majority of ​countries ​worldwide by ​the year 2030,” ​says Dr. ​Michael Jacob, ​lead author of ​the study from ​the Mercator ​Research ​Institute on ​Global Commons ​and Climate ​Change (MCC) in ​Berlin. In ​India alone, a ​carbon tax ​would generate ​around 115 ​billion US ​dollars a year, ​”and only a ​fraction of ​that would be ​needed for ​clean water, ​meaning that ​enough money ​would remain ​for sanitation ​and electricity,​” said the ​researcher. In ​fact, the ​needed ​infrastructure ​for this second ​largest country ​of the world ​would consume ​only about four ​percent of the ​revenue from ​the tax. ​

 
That said, ​there are a few ​countries, ​especially in ​Sub-Saharan ​Africa (see ​figure below), where ​carbon pricing ​would not ​suffice, namely ​because carbon ​emissions there ​are so low that ​they would ​yield little ​revenue. “​However, this ​funding gap ​could be closed ​when considering ​that developing ​countries have ​not yet ​exhausted their ​right to use ​the atmosphere,”​ says Jakob. “​Avoidance of ​emissions would ​then entitle ​them to ​compensation ​payments from ​industrialized ​countries.” ​

 
drinking water supply and carbon tax

 
The MCC study,​ which examined ​the development ​potential for ​not only water, ​sanitation and ​electricity but ​also ICT and ​roads, was ​published today ​under the title ​”Carbon pricing ​revenues could ​close ​infrastructure ​gaps” in the ​journal ​ World Development . In their ​calculations, ​the researchers ​assume that ​every country ​in the world is ​now introducing ​a steadily ​increasing ​carbon tax. In ​2020 the tax ​would have to ​be 40 US ​dollars per ​tonne of CO? ​emissions and ​increase up to ​175 US dollars ​by 2030. ​

 
“In addition ​to generating ​revenue for ​infrastructure, ​the tax would ​thus contribute ​to the ​international ​goal of ​limiting global ​warming to two ​degrees,” ​explains Dr. ​Sabine Fuss, co-​author of the ​study who is ​also a guest ​researcher at ​the International ​Institute for ​Applied Systems ​Analysis (IIASA)​. “This is ​because the tax ​penalizes the ​use of fossil ​fuels and ​creates ​incentives for ​zero-carbon ​technologies.” ​Money not ​needed for the ​infrastructure ​could be used ​to mitigate ​climate change ​impacts such as ​rising sea ​levels, which ​affect in ​particular the ​developing ​countries. ​

 
As is well ​known, raising ​the price of ​coal, oil and ​gas as part of ​climate ​protection ​measures brings ​its share of ​problems. “​Nobody wants to ​pay more. But ​that’s ​exactly why the ​idea to fund ​vital ​infrastructure ​directly from ​carbon revenue ​has clout,” ​says Jakob. ​Linking the ​revenue to a ​specific use ​increases ​acceptance ​among the ​population and ​decreases the ​risk of ​misappropriation.​ In addition, ​carbon pricing ​could be used ​to reduce the ​burdens facing ​in particular ​the poorer ​segments of the ​population, ​such as the ​value added tax.​ “One thing is ​clear: For ​climate ​protection to ​be effective it ​must be ​embedded in a ​broader ​sustainable ​development ​scheme, and ​vice versa,” ​says Jakob. “​Simply infusing ​more money ​won’t solve ​the problem. ​Instead, ​decisive ​factors such as ​a functioning ​state, ​democratic ​decision-making ​and the ​relevant ​institutions ​must be taken ​into consideration.​”

 
Source:
EurekaAlert

 

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Link to the cited study:

Jakob, M.; ​Chen, C.; Fuss, ​S.; Marxen, A.; ​Rao, N.; ​Edenhofer, O. (​2016): Carbon ​pricing ​revenues could ​close ​infrastructure ​gaps. ​ World Development , http://dx.doi.​org/10.1016/j.​worlddev.2016.​03.001

About the MCC:

The MCC ​explores ​sustainable ​economic ​development as ​well as the use ​of common goods ​such as global ​environmental ​systems and ​social ​infrastructures ​against the ​background of ​climate change. ​Our seven ​working groups ​are active in ​the fields of ​economic growth ​and development,​ resources and ​international ​trade, cities ​and infrastructures,​ governance and ​scientific ​policy advice. ​The MCC was co-​founded by the ​Mercator ​Foundation and ​the Potsdam ​Institute for ​Climate Impact ​Research (PIK). ​

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