Connecting Sanitation with Climate Finance : 3 key takeaways for the sanitation sector from the IPCC 2022 report

By Sumeet Pawar, Sanitation and Circular Sanitation Adviser at FINISH Mondial

The sanitation sector has been overlooked for too long in the climate change agenda, but it is finally starting to get some attention. There is an increasing recognition that poorly-managed sanitation and wastewater systems are not only a big contributor to carbon emissions, but also that climate change threatens existing sanitation systems and public health gains made over the past decades. This recognition is important not only for achieving greater resilience in sanitation systems, but also to eventually attract climate finance into water and sanitation. Still, much more needs to be done at the global and regional levels. In a nutshell and aligned with the IPCC 2022 report, we need better design, better research, and better financing. Below we will explore how these 3 key takeaways can guide us towards more climate-resilient and climate-friendly sanitation systems:

1. Better design: the vulnerability of water and sanitation infrastructure to climate and non-climate hazards is largely dependent on the way we build our sanitation systems

Water and sanitation infrastructure is compromised by both extreme and slow climate change events resulting in impacts on individual health, economic losses, and distribution of services. Sanitation infrastructure becomes particularly vulnerable if design standards do not account for rapidly changing climate conditions. Floods for instance can have a devastating effect on poorly constructed sanitation systems, with human waste spreading into waterways and threatening safe water supplies. Implementing decentralized and non-sewer sanitation solutions in emerging economies will help to reduce or control the risk of cascading failures and system breakdown. At FINISH Mondial (FM), we have been working with decentralized and non-sewer sanitation programmes in several of our countries. And so far, we have been able to construct 1.4 million improved sanitation facilities, including flood-proof toilets, through mobilizing local finance and stakeholders. FM has also organised multiple sanitation hackathons for resilient and flood-proof toilets innovations.

At the same time, we should also push for more climate-friendly designs in water and sanitation services, which means pushing for sanitation systems that are not only capable of withstanding climate extremes but also actively contribute to reducing greenhouse gas emissions. Costs of construction and maintenance of sanitation infrastructures will only increase with global warming, making efforts to find innovative designs even more urgent. More effective partnerships between governments, the private sector and society will enhance the adaptative capacities of sanitation systems and the people using them.

2. Better research: not all water and sanitation solutions are good fits for rapidly changing climate conditions, more evidence-based emphasis on climate change adaptation in sanitation is needed

Roughly 4.2 billion people cannot access safe sanitation (WHO and UNICEF, 2019). 2.8 billion people will likely still lack access to safely managed sanitation in 2030 considering the current rates of development (UN, 2022). The increase in rapidly changing extreme events is compromising the effectiveness of water and sanitation services and slowing down the progress we made in fighting water-borne diseases. Poorly designed water and sanitation services infrastructure will not withstand climate hazards, which may reverse progress on universal access to water and sanitation. Limited efforts are made in research to quantify climate change adaptation in the water and sanitation sector. We need to push for more and better research on this.

Quantifying long-term mitigation measures of decentralized sanitation systems will also help attract private climate finance. FM actively engages with universities, national research organisations, and policymakers e.g., IHE Delft, ICAR-IISWC Indian Institute of Soil and Water Conservation, and various ministries in FM countries.

3. Better finance: climate change adaptation is underfinanced. Current investments in Nature-based Solutions (NbS) and climate change adaptation and mitigation in the decentralised sanitation sector are very low. But more adequate and appropriate financing solutions are emerging, like blended finance and investments through insurance and pension schemes

Decentralized and non-sewered sanitation systems have the potential to enhance the resilience and adaptive capacity of communities. They are also much more cost-effective and energy efficient. But adaptation technologies and their impacts depend on available finance. Currently, climate finance is mostly directed at physical infrastructure rather than at nature and social infrastructure. Furthermore, approximately 80% of climate finance goes to mitigation and less than 20% to adaptation (IPCC, 2022), with the greatest chunk of adaptation finance going to water and coastal management. Faecal sludge and wastewater management unfortunately barely see a dime of the climate money. Since private financing is more based on returns and scale, it plays a minor role in adaptation financing (World Bank, 2019). Within this small scale, decentralized sanitation systems are often neglected (or we only have limited examples available).

At FM, we actively work on finding innovative financing mechanisms for the sanitation sector, from working with microfinance institutions at the household and SME level to set up a EUR 250 million sanitation and water impact fund for scaling and long-term sustainability of sanitation initiatives. We work with new stakeholders, like pension funds and insurance companies who are increasingly interested in the sanitation loan sector. We are also following the OECD’s RIO Markers system to track finance flows targeting themes of Rio Conventions, which monitors and statistically captures development finance flows into four themes of RIO Conventions including climate change mitigation and adaptation. FM contributes to climate change mitigation and adaptation as identified in the following sectors in Rio Marking: water, sanitation, health, waste management/disposal, governance, energy conservation, renewable energy generation, financial services, agriculture, environmental policy, environmental protection, environmental education/training, etc.

The integration of sanitation into climate change mitigation and adaptation is a relatively new challenge. Through better design, research, and innovative finance, sanitation can be positioned as an enabler of climate goals. At FM, we continue our work of finding new pathways to include water and sanitation in climate financing strategies so we can bridge the finance gap to reach universal access to clean water and sanitation (SDG 6). Join us in our efforts!

Sumeet Pawar is a Sanitation and Circular Sanitation Adviser at FINISH Mondial. He will be at the Stockholm World Water Week talking about sanitation and climate finance. Join him on the 23rd of August (Tuesday) at 13:00, online, for the “Connecting non-sewered sanitation to climate finance. Missing links?” session.

FINISH Mondial is a sanitation development programme in Bangladesh, Ethiopia, India, Kenya, Tanzania, and Uganda. It focuses on the entire sanitation value chain and access to safely managed toilets through financial inclusion and a sanitation circular economy. In 2021, FM achieved the milestone of more than 1.4 million safely managed toilets. FM has a key focus on resource recovery from the sanitation value chain (SWM & FSM) through a circular economy approach for agriculture and energy need.