Pro-Poor Environmental Fiscal Reforms
Pro Poor Environmental Fiscal Reforms in Drinking Water Sector
Usman Mustafa,* Iftikhar Ahmad** and Mirajul Haq***
Water is life. Inadequate water supply, sanitation, and hygiene are causing major environmental degradation and health concerns in Pakistan. There is a close nexus between environmental degradation and poverty. Poor people are the most sensitive and affected segment of the population, directly and indirectly affected by environmental degradation. It is, therefore, essential to analyze data and conduct a study on the basis of poor and non-poor consumers at the district level for effective and efficient implementation of pro-poor Environmental Fiscal Reforms (EFR).
This study estimated poverty on the basis of consumption and investigated the status, consumer perceptions, willingness to pay (WTP), and potential revenue from the provision of safe drinking water in the Abbottabad district of Pakistan. Three-stage, stratified, systematic, random sampling techniques were adopted for the study. The sample size including both urban and rural households (HHs) was 455, which consisted of 2779 HHs members. The study estimated that 16 percent people out of the surveyed HHs were below the poverty line, which was 21 and 12 percent in rural and urban areas, respectively. Only 10 percent of the poor and 63 percent of the non-poor had access to tap water at home.
The drinking water sector has a lot of potential for anchoring EFR initiatives. More than two-thirds (70%) of the surveyed households showed willingness to pay if they are provided an adequate and safe drinking water supply. The average WTP for improved water services was 58 rupees. Therefore, the potential estimated revenue would be 1,80,74,424 rupees per annum. This reflects substantial potential for making EFRs pro-poor.
* Dr. Usman Mustafa is Chief of Project Evaluation and Training Division and Advisor to the “Building Coalitions for Change and to Implement Pro-Poor Environmental Fiscal Reforms (EFR)” Project at the Pakistan Institute of Development Economics (PIDE), Islamabad, Pakistan. The EFR project is an IUCN/PIDE collaborative study.
** Mr. Mirajul Haq is a Research Economist at the Pakistan Institute of Development Economics (PIDE), Islamabad, Pakistan and a team member of the PIDE/IUCN EFR Project.
*** Mr. Iftikhar Ahmad is the Staff Economist at the Pakistan Institute of Development Economics (PIDE), Islamabad, Pakistan.
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