Guidelines Glossary

Financial analysis is undertaken to determine a budget for the project, as well as the intrinsic (before financing) and financial (after financing) value of a project, for individual economic entities or a group of entities. It is a very useful tool to verify the ‘affordability’ of water for the poorest groups. Economic analysis broadens the perspective to national scale and allows assessment of the relevance, effectiveness, efficiency and viability of the project. However, as it cannot always give a full picture of the factors affecting a given project, it should not be used as a sole criterion for making decisions, but used in combination with other analyses (see Chapter 13 for a fuller description).

The ecosystem is the ecological framework within which flora and fauna exist and thrive. The aquatic ecosystem covers the components of the hydrological system: lakes, rivers, streams and wetlands, but is defined also by floodplains, catchments and estuaries which constitute complex and interrelated hydrological systems. Each of these components function in a larger ecological landscape influenced by the other components of the hydrological cycle including adjacent terrestrial systems. Management of the ecosystem involves ensuring that flora and fauna exist in harmony with their environment. Changes to the ecosystem occurring naturally are usually slow to make an impact. Man-made changes can upset the balance of the ecosystem and cause it to be unstable. Damage may be irreversible, long-lasting and cause further negative effects. Ecosystem management principles require that changes made to the aquatic environment are environmentally sensitive and will not have an adverse impact on other components or the entire ecosystem.

Further information: Protection of water resources and aquatic ecosystems, UN Economic Commission for Europe, 1993.

Various forms of environmental analysis can be used to identify the potential environmental impacts of a project. In cases where the environmental impact is likely to be significant due to the size and type of the project, a full Environmental Impact Assessment can be undertaken.

Methodologies are explored in Chapter 13 under Environmental Procedures.

The three main approaches to valuing environmental impacts are: using market prices for the physical effects of environmental change on production; the use of stated preferences (what people say their environmental values are); various kinds of revealed preferences (inferences drawn from peoples’ actual behaviour).

Environmental sanitation aims to achieve safe, non-polluting human waste disposal in rural and urban areas, recognising that the nature of sanitation systems has important implications for the quality and safety of the environment as a whole. In many crowded areas where waste disposal presents a health and convenience problem of significant proportions, sewerage is impracticable for cost reasons; its heavy use of water for flushing and the level of contamination it can introduce into waterways also renders it undesirable and costly from an environmental perspective. Over-dependence on ‘flush and discharge’ for human waste disposal in an era of increasing water scarcity has led to calls for an ‘ecological’ approach to sanitation, in which solid wastes and liquid wastes are separately disposed and water for flushing used sparingly if at all. The thrust of environmental sanitation is that on-site disposal via latrines is the preferred system for low-income areas. Many latrine systems also have the advantage that their stored waste contents can over time be used as nutrients for food production; in rural areas they can be used directly by householders, and in urban areas, sold as a fertiliser product for income-generation purposes. However, latrines – especially cheaper models – can be poorly constructed and insanitary, failing to confine waste adequately to prevent contamination of surrounding soil and groundwater and presenting a health hazard at times of seasonal flood. To overcome these problems and others associated with insufficient attention to the environmental implications of sanitation systems, more research is needed both into low-cost and higher-cost technologies and into methods of recycling and treatment.

Further information: Ecological Alternatives in Sanitation, SIDA, 1997; Sanitation Promotion Kit, WHO, 1997.