A/HRC/24/44 B. Insufficient financing and inadequate targeting of funding 28. Challenges related to financing pose significant threats to sustainability (see A/66/255). The current global landscape is rife with rapidly deteriorating infrastructure 48 and with insufficient funding for operating and maintaining these systems. It is estimated that the costs of replacing ageing water supply and sanitation infrastructure in developed countries may be as high as US$ 200 billion a year.49 Underfunding is a present-day issue and a major restriction on the ability to provide sustainable water and sanitation. This is exacerbated during times of crisis. 1. Reductions in spending 29. Where States reduce funding for water and sanitation, there can be major consequences for sustainability, both in growth and crisis periods. Reduction in expenditure can take many forms, such as reducing subsidies to people with low incomes or divesting from the monitoring of service provision. Private sector service providers may also diminish spending, in response to a decrease in revenues as a result of cuts in subsidies or increasing number of users unable to pay for water and sanitation services due to loss of jobs or social benefits in times of crisis. 30. Cuts to public spending particularly affect the poorest and most marginalized, who tend to receive a higher proportion of their income from social security benefits, rely heavily on public services, and spend a higher proportion of their income on basic services.50 Decreases in social spending lead to decreasing social subsidies, which hitherto enabled people to access to affordable water and sanitation. Thus people may be confronted with the dilemma of having to choose between food, water and medicine, which undermines the realization of their human rights. 31. Since 2010 cuts in public expenditure have been the most common reaction to the crisis in Europe. Budget consolidation plans have been introduced, inter alia, in Ireland, Greece, Portugal and Spain, with decreased public expenditure programmes introduced at the request of the European Central Bank, the European Commission, and the International Monetary Fund.51 2. Increased prices and unaffordability-related disconnections 32. Water sector reform often leads to increases in water prices, as can be seen from the recent examples in the United States of America and around Europe.52 Even though these price rises might be indispensable to ensure sustainability, such decisions need to be carefully considered during times of economic and financial crisis because increases occur 48 49 50 51 52 10 See Organization for Economic Cooperation and Development (OECD), “Managing water for all: an OECD perspective on pricing and financing” (2009), available from www.oecd.org/env/resources/42350563.pdf. World Water Assessment Programme, World Water Development Report 3: Water in a Changing World (2009), p. 5. Available from www.unesco.org/new/fileadmin/MULTIMEDIA/HQ/SC/pdf/WWDR3_Facts_and_Figures.pdf. James Harrison and Mary-Ann Stephenson, “Assessing the impact of the public spending cuts: taking human rights and equality seriously”, University of Warwick, Legal Studies Research Paper No. 2011-07, p. 3. See, for example, European Commission, Directorate-General for Economic and Financial Affairs, “The Second Economic Adjustment Programme for Greece: First review December 2012”. Available from http://ec.europa.eu/economy_finance/publications/occasional_paper/2012/pdf/ocp123_en.pdf. See Global Water Intelligence, “Global water tariffs continue upward trend” (2011). Available from www.globalwaterintel.com/archive/12/9/market-profile/global-water-tariffs-continue-upwardtrend.html.