A report published by SUEZ and the Fondation Jean Jaurès calls for rethinking the financing model for water and sanitation services in France to ensure sustainable and equitable access to this resource – SUEZ Group

Report on Financing Water and Sanitation Services in France to Achieve Sustainable Development Goals

1.0 Introduction: The Water Challenge and SDG Alignment

A comprehensive review of the financing model for water and sanitation services in France is imperative to address escalating challenges and ensure the achievement of key Sustainable Development Goals (SDGs). Climate change, regulatory demands, and aging infrastructure place significant pressure on the nation’s ability to meet its commitments, particularly concerning SDG 6 (Clean Water and Sanitation). A joint study by SUEZ and the Fondation Jean Jaurès has been initiated to propose concrete reforms, engaging a wide range of stakeholders to develop a sustainable financial framework for the short, medium, and long term.

2.0 Pressures on Water Resources and Infrastructure

The current operational landscape for water services is defined by acute and structural challenges that directly impact the attainment of several SDGs.

2.1 Climate Change and Environmental Impact

Intensifying effects of climate change, a core concern of SDG 13 (Climate Action), are exerting both qualitative and quantitative pressures on water resources. These pressures compromise the resilience of urban environments, a key target of SDG 11 (Sustainable Cities and Communities).

• Recurring heatwaves and droughts diminishing water availability.
• Increased frequency of floods and extreme weather events threatening infrastructure.
• Heightened competition among water users for a finite resource.

2.2 Infrastructure and Regulatory Demands

Significant investment is required to modernize infrastructure, a goal central to SDG 9 (Industry, Innovation, and Infrastructure), and to comply with new environmental standards. These investments are critical for safeguarding public health and achieving the targets of SDG 6.

1. An estimated €15 billion is required over the next five years solely for network renewal and modernization to limit water losses.
2. Forthcoming regulations, such as the recast Urban Wastewater Treatment Directive (DERU 2), will necessitate further investment by local authorities.
3. The need to treat micropollutants to safeguard water quality presents an additional, significant financial challenge.

3.0 The Economic Framework: An Unsustainable Financial Model

The existing financial model for water services is misaligned with the investment required for long-term sustainability and the principles of responsible consumption.

3.1 Revenue and Expenditure Imbalance

A fundamental paradox exists between the cost structure of water services and the revenue model, which undermines the “water pays for water” principle.

• Fixed Costs vs. Variable Revenue: Approximately 80-85% of service costs are fixed, yet revenues are similarly tied to variable consumption volumes.
• Low Consumer Cost: Water accounts for only 0.8% of average household expenditure, a share that does not reflect the true cost of service sustainability or the investment needed.
• Impact of Conservation: Policies encouraging water conservation, aligned with SDG 12 (Responsible Consumption and Production), lead to declining consumption and, consequently, reduced revenues, creating an investment deficit.

This growing disparity between declining revenues and the “investment wall” necessitates a fundamental rethinking of the tariff structure to ensure the financial viability required to meet national and global sustainability objectives.

Analysis of Sustainable Development Goals in the Article

1. Which SDGs are addressed or connected to the issues highlighted in the article?

• SDG 6: Clean Water and Sanitation: This is the central theme of the article. It directly discusses the challenges in delivering “high-performing water and sanitation services,” including renewing networks, treating pollutants, and ensuring the financial sustainability of these services.
• SDG 9: Industry, Innovation and Infrastructure: The article heavily emphasizes the need for investment in infrastructure. It points to a backlog in “renewing networks and modernising infrastructure” and an “investment wall” that needs to be overcome to ensure the long-term viability of water services.
• SDG 11: Sustainable Cities and Communities: The article addresses urban challenges, specifically mentioning the “recast Urban Wastewater Treatment Directive” (DERU 2) and the need to “combat floods,” which are critical issues for the resilience and sustainability of cities and local authorities.
• SDG 13: Climate Action: The article explicitly frames the water resource challenges within the context of climate change. It states that “the effects of climate change intensify pressure on water resources” through events like “recurring heatwaves and droughts, floods, [and] extreme weather events.”

2. What specific targets under those SDGs can be identified based on the article’s content?

1. Under SDG 6 (Clean Water and Sanitation):
   • Target 6.1: By 2030, achieve universal and equitable access to safe and affordable drinking water for all. The article discusses the financial model needed to “ensure the long-term sustainability of water services,” which is fundamental to maintaining access.
   • Target 6.3: By 2030, improve water quality by reducing pollution. This is directly addressed by the mention of the need for “micropollutant treatment” and compliance with the “recast Urban Wastewater Treatment Directive.”
   • Target 6.4: By 2030, substantially increase water-use efficiency. The article notes that consumption is declining due to “conservation policies and more prudent management of the resource,” which relates directly to efficiency.
2. Under SDG 9 (Industry, Innovation and Infrastructure):
   • Target 9.1: Develop quality, reliable, sustainable and resilient infrastructure. The core problem identified is the need for “€15 billion” in investment “solely to make up for delays in renewing networks and modernising infrastructure.”
3. Under SDG 11 (Sustainable Cities and Communities):
   • Target 11.5: By 2030, significantly reduce the… economic losses… caused by disasters, including water-related disasters. The article’s call to “combat floods” directly supports this target of building resilience against water-related disasters in communities.
4. Under SDG 13 (Climate Action):
   • Target 13.1: Strengthen resilience and adaptive capacity to climate-related hazards and natural disasters. The article links the need for improved water infrastructure directly to adapting to climate impacts like “recurring heatwaves and droughts, floods, [and] extreme weather events.”

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

• Financial Investment: The article specifies that an “additional investment of €15 billion will be required over the next five years.” This figure serves as a direct indicator of the financial resources needed to achieve infrastructure renewal (Target 9.1) and ensure service sustainability (Target 6.1).
• Water Pricing and Affordability: The statement that “water accounts for just 0.8% of household expenditure” is a key indicator. It measures the current affordability but is also presented as a challenge to the financial sustainability (“water pays for water” principle) needed to fund necessary upgrades.
• Regulatory Compliance: The need to comply with new regulations, specifically the “recast Urban Wastewater Treatment Directive (DERU 2),” serves as an indicator for progress towards improving water quality and treating pollutants (Target 6.3).
• Water Consumption Levels: The article mentions that “consumption continues to decline, encouraged by conservation policies.” The rate of this decline is an indicator of progress in water-use efficiency (Target 6.4), although it also highlights a revenue challenge for service providers.
• Infrastructure Condition: The reference to “delays in renewing networks” and the need to “limit losses” implies that the physical condition of the water network (e.g., leakage rates, age of pipes) is a critical indicator for measuring the quality and resilience of infrastructure (Target 9.1).

4. Create a table with three columns titled ‘SDGs, Targets and Indicators” to present the findings from analyzing the article.

Source: suez.com