ROSA: Rate and Energy Efficiency Strategies for Water Sustainability in Panama (Session 3)

The session focused on the concept of the social tariff, a mechanism aimed at guaranteeing access to drinking water and sanitation for low-income families. The types of subsidies that can be implemented were discussed, differentiating between supply subsidies, which are granted to companies to improve the service, and demand subsidies, aimed directly at the most vulnerable users to reduce the cost of their bills. Diego Fernández, senior water resources expert at ECLAC, stressed the importance of guaranteeing that subsidies reach those who really need them, avoiding indiscriminate distribution.

A key focus of the session was the application of tariff blocks, where lower-income users receive subsidies for basic consumption, while those with greater payment capacity cross-contribute. In countries such as Chile, Colombia and Mexico, social tariff schemes have been implemented with varying degrees of success, and precisely these cases served as a reference to discuss the implementation in Panama. The challenge of designing rates that promote the rational use of water without overburdening vulnerable families was highlighted, a necessary balance to achieve sustainability and equity.

Additionally, the concept of the “minimum vital” was explored, a policy applied in cities such as Bogotá and Medellín that guarantees a basic amount of free water for the poorest households. This model was analyzed as a possible option for Panama, in an effort to ensure that no household is left behind, and without access to this essential resource.

The session ended with a call to improve tariff structures in Panama by implementing a more precise scheme for categorizing users and areas of vulnerability. This would allow subsidies to be better targeted, ensuring that the poorest households receive the necessary support. The importance of combining cross- and direct subsidies to ensure that service costs are distributed fairly was also emphasized, along with the possibility of adopting a “living minimum” program.