Transitioning to low-carbon drinking water and sanitation services: An assessment of emission and real water losses efficiency of water utilities

Drinking water and sanitation services are vulnerable to the adverse climate impacts such as persistent low rainfall, extreme droughts and floods. The sector also contributes to climate change by its considerable emissions footprint. Efforts to reduce greenhouse gas emissions (GHGs) in order to tackle climate change have put a spotlight on the environmental efficiency of water utility and sanitation operations. A substantial energy input is used in providing drinking water and sanitation services, particularly, water supply augmentation, water and sewage treatment and pumping. In many countries, the traditional water supplies have been under pressure due to increased drought conditions and climate variability raising water security concerns. Climate-independent water supply options such as desalinisation have exacerbated the energy use in recent times. This chapter presents an approach to internalise undesirable outputs, namely GHGs and real water losses in the assessment of productivity performance of water utilities. The approach extends the conventional productivity assessment to derive an environmentally sustainable measure of utility performance. Using time-series data for the Australian drinking water and sanitation sector, the chapter analyses environmentally-sensitive productivity, which accounts for undesirable outputs. Findings indicate that environmentally adjusted productivity growth of the sector has improved in cumulative terms. However, the environmentally adjusted productivity growth trend has shown a declining trajectory. The conventional productivity assessment overstated the productivity growth compared to environmentally adjusted productivity growth. Incorporating undesirable outputs into performance evaluation frameworks enables environmentally sustainable management of drinking water and sanitation systems and advancing sustainable development goals.