Can hydroreservoirs in tropical moist forest be made environmentally acceptable?

Can hydroreservoirs in tropical moist forest be made environmentally acceptable? Robert Goodland, Anastacio Juras and Rajendra Pachauri

Today's polarization of society for and against big hydroprojects relates to environmental costs, particularly borne by vulnerable ethnic minorities and the poor; such costs include species extinctions and tropical deforestation. This counterproductive polarization can be reconciled by transparency of planning, pluralism involving the society and especially all affected people, and by engendering national consensus on the best project. Detailed criteria for consensus are discussed. These include promotion of energy efficiency and conservation, ranking of alternatives to the next hydroproject, and environmental ranking of potential sites. Environmentally well designed hydro can be preferable to alternatives (coal, nuclear), and most environmental costs can be prevented, thus making hydro renewable and sustainable. Keywords:Tropical hydro; Tropical forest; Sustainability T o observers such as ourselves society in an increasing number of tropical forest owning countries seems to have become polarized into two extremes: for and against big hydroprojects. ~ The media informs us about opponents brandishing machetes at confrontations with p o w e r e n g i n e e r s in the A m a z o n , thousands of demonstrators opposing dams in several countries, hundreds of thousands of signatures on petitions to the United Nations received by the Secretary-General, and even an international celebrity starving himself to death on the banks of the Narmada river in India. One government is Robert Goodland is with the Environment Department of the World Bank, 1818 H Street, NW, Washington, DC, USA; Anastacio Juras is with the Environment Department of Eletronorte, Brasilia, DF; Rajendra Pachauri is with the Tata Research Institute, New Delhi and is President of the International Power Engineering Society. 0301-4215/92/060507-09 © 1992 Butterworth-Heinernann Ltd

alleged to have fallen partly because of a hydroproject proposed for a valuable southern rainforest, and several projects slated for tropical forest areas have been cancelled or indefinitely postponed partly or entirely on environmental grounds. 2 This topic is about more than just helping the utilities win consensus and defuse polarization. We are concerned with global sustainability. 3 One of the most influential ways to achieve sustainability is to accelerate the transition to renewable energy, of which hydropower should be a substantial part. We postpone to another occasion the debate between large versus small projects. We are certain that the world cannot afford business as usual. This is doubly true for big hydro: there is not enough capital available at affordable cost to meet the projected demand for power, 4 The polarization for and against hydropower seems most extreme in countries with tropical forests. 5 This is understandable because tropical forests are often associated with major untouched rivers, and are the world's richest source of biodiversity. Such countries exist in Latin America, Africa, and Asia. So this is very much a global debate, and is not restricted to one or two countries. Both poles could be perceived as adopting extreme positions and unwilling to explore any middle ground. The most promising approach to reconciliation is to promote a national debate to ascertain if there are criteria under which some reservoirs could be developed in tropical forest regions that might be acceptable and sustainable. We believe that the transparency and pluralism necessary for success in such a debate will themselves significantly contribute to consensus building. The whole process must be transparent, including access to consolidated budgets so that all will know who is in receipt of subsidies. For pluralism, academia, NGOs, the private sector as well as the government must be included. This implies a certain amount of decentralization, especially of mitigatory 507

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measures. Full participation, especially of all affected people and their advocates, is also essential. This brings responsibility: all groups must be held accountable for objective performance standards. Assuming national criteria can be agreed upon, and assuming they can be substantially met, are there conditions under which such a reservoir could be justified? Our personal opinion is yes. Some hydroprojects are fraught with major environmental problems, but in the case of others, such problems can be soluble - although with much more effort than is accorded them today. On the other hand, hydroprojects with large reservoirs may also have major side benefits, such as flood control, improved water quality and fisheries. Under certain conditions, recreation, tourism, irrigation and navigation can be made compatible with hydropower. Even without the added benefits of hydropower, the environmental problems of coal (eg COJgreenhouse effect) and nuclear power 6 are much less soluble, and among the alternatives, severe damping of electricity demand could seriously constrain economic development for many developing countries. What might such national criteria be? Producers, consumers and the national society should compile their own lists and their own ideas on the criteria they judge necessary. The present list is suggestive only. The criteria setting process must be widely transparent in order to engender national consensus. This paper presents the case that tropical forest reservoirs meeting such national criteria could be made environmentally acceptable. Assume that a hypothetical nation, some of which is tropical forest, needs more energy. Brown outs, load shedding and rationing are already predicted to be unavoidable in the near future. The choice is between coal, nuclear and hydro. All gas and oil has been exploited or is not economic. The scope for interconnections with neighbouring countries has been exploited or is not feasible. This is important because interconnections enable a more acceptable site in a neighbouring country to be taken up before a worse site in the country in question. Cooperation between Uganda and Kenya is a case in point. The crucial question urgently needing resolution is 'Is there a set of criteria which could justify reservoirs in tropical forest regions?' Although this would apply to tropical forest dams in general, important country specific criteria would also be necessary. Thus trade offs are being faced in many countries, such as between massive increases in coal burning on the one hand, and constructing the world's biggest dam, Three Gorges in China, and the Narmada dams in India on the other. Global common pro-

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perty issues such as CO2 accumulation and biodiversity conservation should not be compromised by country specific criteria.

SECTOR C R I T E R I A For the purposes of this discussion, we assume that the following conditions prevail. The price of electricity must substantially have already reached longrun marginal cost. Virtually all consumers are metered; meters are substantially precise; and major arrears cause prompt cessation of service. The financial stability of the power utility has to be ensured. Most energy conservation and efficiency measures must be substantially in place, both in generation and transmission, as well as inside homes and factories. 'Substantially in place' can be determined when the marginal economic cost (including environmental externalities) of saving an additional kilowatt hour through conservation becomes as high as the marginal cost of a new one produced and delivered to the consumer. This follows from the assumption above. As conservation measures are always advancing, implementation will always lag behind savings potential. The goal is to minimize this lag. In addition, conservation cannot reap results overnight because of restraints on the pace of replacing capital stock and other factors. A long-term, least-cost energy services perspective is needed. And 'least' cost here must fully include environmental and costs borne in the future (intergenerational costs). Decoupling of profits from sales is in the utilities' interest, so that they can make money on margin and not on volume (as markets are not perfectly efficient). Progressive utilities have started selling conservation to consumers. Utilities should be rewarded for efficiency.7 Discounts encouraging overconsumption by large consumers have been repealed, but such consumers not so penalized that they start to generate their own, with possibly worse impacts. Large consumers have shifted to less electricity-intensive methods, where economic and feasible. (Aluminium smelting will always be energy intensive.) National energyefficiency equipment standards are in place. Cogeneration potential has been rationally exploited. All economically perverse subsidies and other incentives have been rescinded. For example, some electricity and fuel pricing policies mandate that electricity and gasoline/diesel prices be the same at the power plant, refinery, port or capital city as they are at the furthest frontier outpost. Such policies promote excessive consumption of fuel, distort in-

ENERGY POLICY June 1992

Hydroreservoirs in tropical moist forest Table 1. Hydropower generated per hectare inundated (examples only)."

Project (country) Paulo Afonso (Brazil) I-IV Pehuenche (Chile) Guavio (Colombia) Rio Grande II (Colombia) Itaipu (Brazil and Paraguay) Aguamilpa (Mexico) Sayanskaya (USSR) Churchill Falls (Canada) Grand Coulee (USA) Urra I (Colombia) Jupia (Brazil) Sao Simao (Brazil) Tucurui (Brazil) Ilha Solteira (Brazil) Guri (Venezuela) Paredao (Brazil) Urra II (Colombia) Cabora Bassa (Mozambique) Three Gorges (PRC) Furnas (Brazil) Aswan High Dam (Egypt) Curua-Una (Brazil) Samuel (Brazil) Tres Maria (Brazil) Kariba (Zimbabwe/Zambia) Sobradinho (Brazil) Balbina (Brazil) Babaquara (Brazil) Akosombo (Ghana) Kompienga (Burkina Faso) Brokopondo (Suriname)

Final rated capacity (MW) 3 984 500 1 600 324 12 6(10 960 6 400 5 225 2 025 340 1 400 2 680 7 600 3 2(1(I 6 0(10 40 860 4 000 13 (100 1 216 2 100 40 217 400 1 500 1 050 250 6 600 833 14 31t

Normal area of reservoir (ha) 1 600 400 1 500 1 100 135 000 12 000 80 0(10 66 500 32 400 6 200 33 300 66 0110 243 000 12(1 (100 328 000 2 300 54 000 380 000 110 000 144 I)00 40 000 8 600 57 900 105 200 510 000 421 400 236 000 600 000 848 200 20 000 150 000

Kilowatts per hectare 2 490 1 250 1 1)67 295 93 80 80 79 63 55 42 41 31 27 18 17 16 14 12 5 5 4 4 3 2 1 1 (I.9 0.7 0.2

Note: aThis table is indicative only, since it does not reflect the value of the land

inundated, which differs greatly in value. Some of the land inundated is river bed. The more reliable ratio derived from kWh/ha instead of kW/ha is being calculated. Some of these figures are for non-forest reservoirs and most are hydropower, rather than irrigation reservoirs. Area inundated is the key issue. Less seasonal tropical wet forest reservoirs do not need to be large. Optimizing the trade offs at the margin of reservoir capacity is more influential than between having or not having a reservoir.

dustrial, population and agricultural siting policies, raise prices in the main load centres and discourage efficient energy production in remote areas. All rehabilitation and expansion of existing sites has already been accomplished. This is almost always achieved at much less environmental and economic cost than construction of new sites. The large number of hydroprojects completed in the 1950s and 1960s can be modernized to postpone the need for new projects. Owen's Falls, for example, only turbines 50% of the available water. DAM

CRITERIA

As for sector criteria, we assume all reservoir sites outside tropical forests have a l r e a d y been developed, or are not socially, e n v i r o n m e n t a l l y or economically acceptable. The proposed dam has a high ratio of power

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production per area inundated. Some hydroprojects have no reservoirs. On a ratio of kilowatts per hectare, the reservoirs with the highest ratios, in the many hundreds, include Pehuenche, Guavio and Paulo Afonso: all exceed 100. s The lowest ratio reservoirs, less than 10, include Brokopondo, Balbina, Sobradinho, Samuel, Babaquara and CuruaUna: all are under 5. Babaquara's low ratio contributed to its cancellation. A few are less than 1, such as Suriname's Brokopondo and Burkina Faso's Kompienga. Could one, admittedly arbitrary, criterion or cut off point be 30, as in Tucurui (Table 1)? Clearly this depends on an expanded cost-benefit analysis in each case. If the ecosystem to be flooded is intact primary tropical forest, the ratio should be set much higher (say 100); if the ecosystem is agricultural or degraded land, then the ratio should be set lower. Economists are struggling to price intangibles, irreversibles and intergenerational equity, such as are involved in extinction of species. 509

Hydroreservoirs in tropical moist forest

The proposed site and surroundings have had a thorough biotic inventory, and there are no centres of species endemism, high biodiversity or other special features. The ecosystem of the proposed site is very well conserved in perpetuity nearby, as a compensatory area ecologically equivalent to or better than the flooded area. The biotic salvage will be effective. Live rescue for release into biotically impoverished habitat or into zoos and aboreta has rarely been effective historically, although captive breeding and reintroduction merits invigoration. More cataloguing and preservation of seeds and dead species is also urgently needed. The reservoir water retention time is brief, days or weeks, rather than many months (ie there is a rapid circulation rate). The shorter the retention time, the less time for anaerobic conditions to be created, and the better will be the water quality both in the impounded area, as well as downstream for all uses. 9 The nearer to the run of the river the project is, the fewer will be the environmental problems. The trade off here will be between valuable interseasonal and over year regulation, which can be less needed in seasonless rainforest areas. Less regulatory capacity means fewer benefits from flood control. This essentially means that two types of site are especially valuable: first, canyons in which the reservoir does not rise above the top (these do not need large flows); harnessing waterfalls that fish never ascend prevents migratory fish problems. Second, no-head, in-stream axial turbines do not flood the forest. The site has such a low volume of biomass that its decay will neither contribute significantly to greenhouse gases, nor impair fish and water quality, nor will valuable biomass be wasted or clog turbine intakes. Removal of economically extractable biomass decreases greenhouse gas production and water quality risks. By inventing submersible chainsaws, Eletronorte utilizes already inundated trees in its Tucurui reservoir. Brief retention time has to be balanced with storage needed for irrigation and navigation. There are no vulnerable ethnic minorities living in or using the general area of the proposed site. No other settlements will be affected, unless oustees' livelihood after resettlement is guaranteed to be better than before any moves, as measured by systematic socioeconomic surveys. Higher 'firm GWh/family-displaced ratio' projects should have preference. But more significant is the subsequent improvement in livelihood. This means that the proposed site has been thoroughly assessed by sociological and anthropological professionals well before any decisions were made. Direct internalization of costs to resettle adequately may be accept-

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able for normal oustees. But for vulnerable ethnic minorities experience shows that it has not yet been possible to achieve adequate resettlement. Sometimes it is not obvious who the beneficiaries are. For example, in tropical forest reservoirs used for export aluminium smelting, the beneficiaries are the industrial countries' aluminium consumers. In such a case for whom are the tropical hydroproject owning decision makers deciding? Similarly in James Bay: the Cree claim the land flooded; the Quebec and Canadian governments also have claims; is North America the beneficiary? These questions highlight the need to address explicitly the trade off between the beneficiaries and the people bearing the costs. There are no water-related diseases, such as malaria, Japanese 'B' encephalitis, and schistosomiasis anywhere in the general region. Nor are they likely to arrive. The risk of their arrival is reduced by destruction of the nearest loci. If water-related diseases are present, they should preferably be eradicated before the impoundment creates more habitat. If this is impossible, the diseases should be at least controlled and a public health component integrated into project design. The proposed dam is sited above undammed tributaries, to help minimize changes in flood regime (on which wetlands depend) and to provide alternative upriver sites for migratory fish. There is much uncertainty about even relatively very simple, depauperate northern fish biological systems and their behaviour as related to impoundments. Certainly much more effort than at present is needed to increase benefits and opportunities from fisheries. The dam is also proposed for an already dammed river. From the environmental point of view, dams should be concentrated on already dammed rivers, rather than siting one or a few dams on a larger number of rivers. Thus, a representative sample of the nation's rivers would remain in their natural, free flowing state. This trade off with the risk of low flows curtailing power output should not be common, since tropical wet forested catchments are not usually seasonal. In multipurpose dams, the enormous value of the annual flood restoring productivity downstream should be factored in. It is relatively easy to include bottom sluices at the design stage for such releases. Dams that would cause extinction should be avoided (including those of migratory fish that would be denied access to breeding or feeding sites). This means that the damming of the last few free flowing rivers in a region will be even more difficult to justify. In tropical forest areas, roads built to facilitate hydroproject construction or operation can open up

ENERGY POLICY June 1992

Hydroreservoirs in tropical moist Jorest

significant areas to colonization and deforestation. Care must therefore be taken during road planning and operation to reduce this effect.

C R I T E R I A ON SMALL-SCALE A N D U N C O N V E N T I O N A L POTENTIALS Small-scale and unconventional potential alternatives are being examined or are already substantially exploited. Privately owned renewable energy generators sell surplus to utilities: • • •

•

no-dam (or very low head) axial tube turbines within river; small generating systems (including water wheels); solar elsewhere in the country (including photovoltaics, tidal, wind and hydrogen from splitting water molecules);W biomass energy production (biomass plantations, garbage and sewage).

Many tropical forest countries contain dry sunny or even desert regions where solar powered electric plants can be sited. They occupy 1/10th to 1/20th of the land of even high head/low area hydroschemes, and often can put otherwise unproductive land to sustainable use. We feel, and the World Bank is in the process of calculating, that this is already an economic option in comparison with hydro when the value of inundated forest is internalized, even imperfectly.

P O P U L A T I O N STABILITY C R I T E R I A Population stability is an essential precondition for all sustainable use of renewable resources, including use of hydropower and use of tropical forests. Populations of tropical moist forest owning countries annually increase by more than 2.4%, which means a doubling in 25 years. These sustainability criteria will be difficult enough to fulfil without having to double the electricity supply every 25 years. Actually the situation is more severe in those countries in which the per capita electricity use also is rising. Average planned power demand growth is about 7% in developing countries - a doubling every 10 years. (In Brazil per capita use is projected to rise 55% by the year 2(t00.) It is sensible to permit electricity companies to profit from their customers' investments in conservation. Utilities should not be penalized for investments in conservation. An increasing number of

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northern utilities now find it more economic to provide free fluorescent light fixtures and to promote or even to subsidize other more efficient appliances for consumers, rather than generating more electricity. This suggests that the pricing policy is wrong in these cases. Although this requires sensible action on pricing in the power market, which does not yet exist in most developing countries, the preference is clear. Utilities now conduct free energy audits for consumers, showing where energy can be conserved most cheaply. To the extent this holds for the population, power corporations' support of governmental family planning goals will reduce the national controversies and project delays commonly experienced. Power corporations already help to the extent that televisions are contraceptive. We do not want to burden the power sector with righting all societal ills. However, population stability is so important for sustainability that family planning or similar activities should be components of all relevant projects, including the power sector.

CASE E X A M P L E OF B R A Z I L The above informal suggestions are generic rather than specific to any particular country. However, Brazil in general and Eletrobras and Eletronorte in particular are deeply concerned with both energy conservation and environmental impacts. As indeed is the citizenry, if not more so.~l Brazil has probably saved more than US$1 billion in new generation capacity avoided, because of recent major improvements in the electricity tariff structure, which have led to more conservation and efficiency. 12The World Bank has commended Brazil for moving towards a more appropriate tariff structure, and in the direction of the difficult goal of raising the price of electricity towards the long-run marginal cost of production. The World Bank values the partnership with Eletrobras and has assisted in financing PROCEk, under the direction of Science and Technology Secretariat. The World Bank is also glad to be partners with The Environmental Secretariat and IBAMA in the first and biggest loan solely for national environmental priorities and institutional strengthening (US$117 million in February 1990). The government, Eletrobras, Eletronorte and environmentalists are now adopting a new position on new Amazonian hydroprojects, resulting from evolution of environmental awareness, specific legislation and experience with Amazonian issues. 13 Current construction rankings have proved that en-

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vironmental criteria can be applied proactively, This emphasis on environment, conservation and efficiency is exceptionally well placed. The recent hiring of substantial numbers of environmental professional staff by all Eletrobras's concessionaries is encouraging. For example, Eletronorte's environmental staff have risen from less than 1 at the time Tucurui was designed in the late 1970s to over 100 today. 14 Environmental training throughout the entire power sector has increased dramatically. Capital availability is a major constraint on the power sector, which has been responsible for as much as 25% (US$30 billion, 1973-83; now about 19%) of Brazil's foreign debt. Eletrobras may require of the order of US$75 billion to meet its 1991-2000 demand projections. In today's era of severely limited capital, such high public investments in any sector such as power supply could imply reducing investments in other sectors, especially the environmental and social sectors of education, nutrition, poverty alleviation and health. Thus electricity, formerly a driving force behind social and economic development, could instead hinder vital welfare gains, if improved pricing, conservation and environmental precautions are not achieved. Could we be entering an era in which power investments reduce investments in other sectors whose growth was the driving force underlying electricity demand projections? Electricity rationing started during the north-east 1985-86 drought, and is projected for the mid-1990s. Eletrobras projects that electricity demand will double between 1988 and 2000. This means that 37 000 MW need to be installed by 2000. How best to install the equivalent of three new Itaipus in this decade? How to avoid repeating delays, confrontations and wastage? The picture is encouraging. One of the next Amazonian dams may be the 1328 MW Serra Quebrada project just upstream from Tucurui. This meets many of the criteria listed above, and contrasts starkly with the Balbina/Babaquara-type. ~5 According to Eletronorte, there are no Amerindian settlements, and little involuntary resettlement. The reservoir is small and virtually run of river, and has a high ratio of kW/ha of land flooded (31.5), which is slightly better than Brazil's biggest hydroproject, Tucurui. In addition, it is on the already dammed Tocantins River, rather than being the first on a hitherto undammed Amazonian river. This presages well for the ranking of the next Amazonian dams potentially identified by Eletrobras's Plano 2010 for the next twenty years. The range between the best and worst hydro sites is so wide that the least cost (after conservation) power

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investment programme will include a full array of sources, such as gas and imported power. Coal and possibly at some time in the future even nuclear (with best technology), may be found by Brazil to be better than the worst hydro on future ranking on national criteria. A mixed hydro-thermal system implies fewer reservoirs. Eletronorte has a massive challenge. Recent developments (eg PROCEL, GERE, cancellation of Babaquara, criteria of Serra Quebrada) suggest promising improvements. National consensus on the kind of criteria suggested above will ensure that the trend is strongly positive. The World Bank wants to support this trend to the fullest extent possible.

CASE STUDY OF INDIA The case of India differs substantially from that of Brazil in the sense that India has not invested a substantial share of its power sector resources in hydroelectric plants. The main reasons for this are first that India has 148.6 billion tonnes of non-coking coal, and second that development strategies have relied only to a very small extent on foreign borrowings. Even though the Indian economy has generally recorded a savings rate of over 20%, resource mobilization in the power sector remains severely constrained. This has happened for three main reasons. First, power sector demand growth in recent years has been rather high (9-10% pa), with a growing peak demand relative to base load demand. Second, the electric utility industry has accumulated heavy losses on account of suppressed tariffs and operational inefficiencies. Third, high population growth (1.8% pa) continues to impose onerous demands on investments in education, health care, welfare schemes and infrastructure, thereby relegating the power sector to one of many sectors competing for limited resources. These factors have resulted in a preference for relatively short gestation thermal power plants as opposed to hydroelectric capacity. While hydro and thermal had almost the same share of power generation (45% versus 55%) in 1965-66, the ratio is now 30% hydro versus 70% thermal. Fortunately Indian coal is low in sulphur, even though its ash content exceeds 40% in some power stations. As a result, the main environmental problems of thermal power stations are particulate emissions and ash disposal. Except in regions like the Rihand reservoir now well known for the Singrauli thermal power plants, acid

ENERGY POLICY June 1992

Hydroreservoirs in tropical moist Jbrest "Fable 2. Indian energy tariffs.

Energy source Domestic cooking (rs/1000 KCal) Ke rose ne Electricity Irrigation (rs/1000 m ~ of water) HS diesel Electricity

Economic price

Market price

7.78 20.43

5.63 8.49

109.64 107.19

142.2 9.03

rain is not now, nor is it likely to become, much of a problem. India's main hydro sites are in the Himalayas, with a large share concentrated in the north-east. India has a land to population ratio of only 0.004 km 2 per capita, as compared with Brazil's 0.07 km e per capita. High population densities, land scarcity, particularly agricultural, and disappearing forests are three crucial factors in Indian hydro planning. For example, the major issue in the 1200 MW (US$1.13 billion) Sardar Sarovar hydro and irrigation project on the Narmada river is the involuntary resettlement of people. These 9(I 000 oustees are not well equipped to adapt to new habitats, having historically a long intergenerational dependence on the land and its specific biota. In addition, the track record of Indian involuntary resettlement is poor, so that hydroprojects are likely to run into heavy public resistance. ~5 Capital constraints in the Indian economy are intensifying; the impact on the power sector is therefore likely to become more serious in coming years. Typically, the power sector has accounted for less than 20% of planned public sector investments, but the targets for the current (eighth) five-year plan demand a higher share. Therefore, energy efficiency improvements become more urgent. Conservation is important here not only at the end-use level, but also in the energy supply industry itself. For instance, official transmission and distribution losses have risen to 22%, and as high as 40% in some states. Similarly, coal thermal efficiencies are well below state of the art levels, with some plants attaining only 20%. There are therefore tremendous opportunities for efficiency improvements in the power industry, which would m o d e r a t e new capacity growth, without sacrificing electricity supply. Irrationally low energy tariffs, far below long-run marginal costs, are the main reason for lack of energy conservation. This is particularly true in the power sector where some end-user subsidies are extremely high, as shown in Table 2. Efficiency improvements must begin with adjustment of energy tariffs, in order to provide the consumer with

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appropriate signals. Improved efficiency may not reduce aggregate demand for power to the extent that quantity restriction now constrains. Investments in physical capital have to be matched with investments in human capital, especially in power sector planning and e n v i r o n m e n t a l assessment. Such human capital investments would have larger returns than almost any other form of investment in the power sector. CONCLUSION The conclusion devolves on the likelihood of a country fulfilling most of the above criteria. These criteria are stringent even for industrial countries. To what extent will such criteria be fulfilled? We agree that sceptics who rightly claim that not all these criteria will be fully met. But the process of agreeing and approaching the criteria will be salutary. Do sites fulfilling most criteria exist'? The least bad site certainly exists. The answers will be difficult in some cases, but possible in others. Although difficult, this course is better than the alternatives, and much easier than damping demand until solar/ hydrogen energy becomes feasible in the next decades. Such damping pain should be thought through and discussed with all interested parties, as part of the criteria setting and consensus building exercise. Proper pricing makes the choices more obvious. In sum, we need to compare costs and benefits much more rigorously and comprehensively than has been done so far. In our imperfect world, the reality is that not all these criteria will ever be totally met. Therefore, national consensus is needed to decide if conservation, efficiency, environmental precautions and other alternatives are being pursued adequately or not. The national consensus is essential in order to agree on the threshold at which the next best - or least bad - site should be developed. National agreement on criteria will reveal where the thresholds lie. As soon as the various environmental impacts can be valued, the polarization of society will be defused. The need is to make uncertainty transparent and positive, rather than covert and manipulative. As hydropower is exceptionally capital intensive and capital availability is a major constraint in nearly all nations, tropically forested or not, it is imperative to follow the least cost (as defined above to include social and environmental costs) sequence of development. Of course, least cost specifically includes saving kilowatt hours, not just generating them,

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based on consumer choice when facing appropriate prices. We urge the use of proper opportunity cost of capital. Arguments for simultaneous development of higher cost alternatives should be rigorously resisted. Power corporations are commendably making the transition away from sole focus on new capacity, and towards conservation and efficiency. This is difficult for them because new capacity is under their almost total control, whereas conservation means they have to persuade other sectors outside their control. Power corporations wanting to promote sustainability, and to reduce national controversies and delays would follow a vigorous action programme with serial steps along the following lines: t7 1. 2. 3. 4. 5. 6. 7.

promote fulfilment of agreed on criteria; manage demand to the fullest extent justifiable; promote agreed on valuation of impacts; seek sites fulfilling nationally agreed upon criteria; sequence all sites in a national least-cost power programme, under credible scenarios; rank all potential sites on the basis of these criteria; and only then, develop the least bad new site fulfilling such criteria.

In addition to the comments by World Bank colleagues, we wish to acknowledge with great pleasure the support of then president of Eletronorte, Armando Araujo (now Secretary of National Energy), and Howard Geller for his most helpful reviews of this paper.

1The most comprehensive documentation of this polarization is E. Goldsmith and N. Hildyard's three volume opus, The Social and Environmental Effects of Large Dams, Ecological Centre, Wadebridge, UK, 1985-1991. 2Recent costly dam fights, mainly over environmental issues, include India's 240 MW silent valley hydroproject in Kerala's remnant rainforest cancelled in 1980; Thailand 1986 Nam Choan, 2000 MW lost after feasibility stage; Thailand 1991 Pak Hun: dam relocated and dam height lowered, delayed but now proceeding; Brazil 1988 Barbaquara: 6000 MW lost due to campaign by rock singer Sting. India Narmada: five-year delay after feasibility, new investigation (1991-92) awaited; Australia's 180 MW Franklin River in Tasmania's World Heritage rainforest was shelved in 1983. See Comissao Pro-Indio de Sao Paulo, 'O que e o aproveitamento hidreletrico de Cachocira Porteira?', CPI, Sao Paulo, n.d. (1989?); S. Margulis, O desempenho do Governo Brasileiro e Banco Mundial corn relacao a questao ambiental em projetos co-financiados pelo Banco, 1PEA, Rio de Janeiro, 1990; M.P. Paiva, The Environmental Impact of Man-Made Lakes in the Amazon Region of Brazil, Eletrobras, Diretoria de Coordenacao, Rio de Janeiro, 1977; M.P. Paiva, As grandes represas do Brasil, Editerra, Brasilia, DF, 1982; L.P. Rosa, 'Hidreletricas e meio ambiente na Amazonia: analise critica do Piano 2010', Revista Brasileira de Energia, Vol 1, No 1, 1989, pp 7-24; L.P. Rosa, L. Sigaud and O. Mielnik, eds, Impactos de grandes projetos hidreletricos e nucleares, Ed. Marco Zero, Sao Paulo, 1988; L.A.O.

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Santos and L.M.M. de Andrade, As hidreletricas (do Rio Xingu) e ospovos indigenas, Comissao Pro-Indio de Sao Paulo, Sao Paulo, 1988. 3Sustainability as a concept has been formally endorsed as an official priority of the United Nations system, and by the World Bank. Although the Bank knows more about the concept than it is comfortable in admitting, it is difficult to operationalize the concept in all work. As they depend on the hydrological cycle, hydroprojects are theoretically renewable indefinitely. Sustainability here refers to two levels. First, the environmental and social costs - often not fully internalized - must be valued and clearly outweighed by the benefits. Second, the life of the project must not be damaged by environmental abuse, such as rapid sedimentation due to lack of watershed management upstream. Daly and Cobb have thought through the concept of sustainability the furthest, as have Adams, and Goodland et al. See H.E. Daly and J. Cobb, For the Common Good: Redirecting the Economy towards Community, the Environment and a Sustainable Future, Beacon Press, Boston, MA, 1989; W.M. Adams, Green Development: Environment and Sustainability in the Third World, Routledge, London, 1990; R. Goodland, H. Daly and S. El Sarafy, eds, Environmentally Sustainable Economic Development: Building on Brundtland, The World Bank, Environment Department Working Paper 46, Washington, DC, 1991. 4M. Imran and P. Barnes, Energy Demand in the Developing Countries: Prospects for the Future, World Bank, Commodity Working Paper 23, Washington, DC, 1990; E. Moore and G. Smith, Capital Expenditures for Electric Power in the Developing Countries in the 1990s, World Bank, Industry and Energy Paper 21, Washington, DC, 1990; World Bank, The Future Role of Hydropower in Developing Countries, World Bank, Industry and Energy Paper 15, Washington, DC, 1989; World Bank, Energy Efficiency Strategy for Developing Countries, World Bank/ ESMAP, Washington, DC, 1989. 5This is a serviceable but arbitrary ratio. Both GWh firm energy and kWh/ha would be better indicators. Such ratios should exclude river bed inundated. ~'The nuclear industry has spent about 75% of total R & D budgets over the last four decades, but even now only generates 3% of global commercial energy. Rather than earning a profit after all these subsidies, abandonment of nuclear plants in the USA alone caused $10 billion losses for shareholders. As 10 000 to 20 000 new nuclear plants would be needed over the next 40 years to replace coal, or opening a new plant every three or four days for decades, this is highly inadvisable. Should the victims of the 1986 Chernobyl accident exceed four million, as seems likely, this will postpone any recrudescence of nuclear projects. If even the skilled and disciplined Japanese can be crippled by the 'very serious' 9 February 1991 accident in Mihama, the possibility of 10 000-20 000 new plants is not reassuring. If radioactive waste storage is solved, and, in addition, if 'inherently' safe designs are achieved, then prospects would improve. 7G. Anandalingam, 'The economics of industrial energy conservation in developing countries', in R.K. Pachauri, ed, Global Energy Interactions, Riverdale Press, Riverdale, MD, 1987, pp 643-661; W.U. Chandler, Energy Productivity: Key to Environmental Protection and Economic Progress, Worldwatch Institute, Washington, DC, 1985; A.P. Fickett, C.W. Gellings and A.B. Lovins, 'Efficient use of electricity', Scientific American, September 1990, pp 65-74; C. Flavin, Electricity's Future: The Shift to Efficiency and Small Scale Power, Worldwatch Institute, Washington, DC, 1984; C. Flavin, Electricity for a Developing World, Worldwatch Institute, Washington, DC, 1986; C. Flavin and A.B. Durning, Building on Success: The Age of Energy Efficiency, Worldwatch Institute, Washington, DC, 1988; J. Gamba, D. Caplin and J. Muckhuyse, Industrial Rationalization in Developing Countries, Johns Hopkins Press (for) World Bank, Baltimore, MD, 1986; J. Goldemberg, T.B. Johansson, A.K. Reddy and R.H. Williams, Energy for a Sustainable World, Wiley, New Delhi, 1988; O. Guzrnan, Energy Efficiency and Conservation in Mexico, Westview, Boulder, CO, 1987; Hagler, Bailly Co, Financing Energy Conservation in Developing (½un-

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Hydroreservoirs in tropical moist forest tries, Hagler, Bailly Co, Washington, DC, 1987; J.P. Holdren 'Global enviromnental issues related to energy supply: the environmental case for increased efficiency of energy use', Energy, Vol 12, Nos 10-11, 1987, pp 975-992; IEA, Energy Conservation in lEA Countries, OECD (for) International Energy Agency, Paris, 1987; IEA, Electricity End-use Efficiency, OECD (for) International Energy Agency, Paris, 1989; T.B. Johansson, B. Bodlund and R.H. Williams, Electricity: Efficient End-use and New Generation Technologies, and Their Planning Implications, kund University Press, Lund, 1989; A.B. Lovins, 'Four revolutions in electric efficiency', Contemporary Policy Issues, Vol 8, 1990, pp 122-141; J.R. Moreira, Electricity in Brazil: Conservation and Other Major Problems of Developing Countries, University of Sao Paulo, Inst. Eletrotecnologia e Energia, 1989; A. Naviglio, 'Energy for development: energy conservation in developing countries', Applied Energy, Vol 36, Nos 1-2, 1990, pp 143-157; PROCEL, Realizacoes e metas de conservacao de energia, Eletrobras, Programa Nacional de Conservacao de Energia Electrica, Rio de Janeiro, 1990; J. van Domelen, Power to Spare: the World Bank and Electricity Conservation, World Wildlife Fund, Washington, DC, 1988; op cit, Ref 4, World Bank (2). SThis paper focuses on hydroreservoirs which are increasingly common in tropical moist forest, rather than on irrigation reservoirs, which do not occur in tropical moist forest; some multipurpose reservoirs and those in tropical dry forest remnants (eg India's Narmada) are mentioned. Irrigation reservoirs may be slated for the tropical dry forest renmants and these would be even more problematic than those in tropical wet forest. '~Decaying tropical forest generates massive volumes of greenhouse gases, especially methane, which is 32 times more damaging than CO2. Large, shallow reservoirs from which forest is not removed may generate vastly more greenhouse gas than a coalfired thermal equivalent (see S. Gupta and R.K. Pachauri, eds, Global Warming and Climate Change: Perspectives from Developing Countries, Tara Energy Research Institute, New Delhi, 199()). ~)Hydrogen from splitting water molecules is likely to become economic and technically feasible very soon (J.M. Ogden and R.H. Williams, Solar Hydrogen: Moving Beyond Fossil Fuels, World Resources Institute, Washington, DC, 1989). While it is difficult to generate 500 MW from garbage and sewage now, a larger number of smaller such plants reduce the need for large projects. l lEletrobras, Manual de estudos de efeitos ambientais dos sistemas eletricos, Eletrobras, Rio de Janeiro, 1986; Eletrobras, Piano nacional de energia eletri( a 2010: relatorio executivo, Eletrobras, Rio de Janeiro, 1987; Eletrobras, Piano diretor de meio ambiente do setor eletrico 1990-1992, Eletrobras, Rio de Janeiro, 199[); J. Goldemberg, T.B. Johansson, A.K. Reddy and R.H. Williams Energy for Development, World Resources Institute, Washington, DC, 1987; A.A. Juras, Environmental Policies as Applied to Eletronorte: The Brazilian Northern Electrical Authority's Enterprises in the Amazon Region, Eletronorte, Brasilia, DF, 1990; A.A. Juras, Hydropower Plants in the Amazonian Region: Opportunities j?~r Acquiring Knowledge, Education and Training in the Field ~fEnvironment, Eletronorte, Brasilia, DF, 1991 ; Z.F.

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Lacerda Neto, 'Environmental impact assessment in Brazil', Environmental Education and Information, Vol 8, No 2, 1990; M.T.F. Serra, 'Resettlement planning in the Brazilian power sector: recent changes in approach', in M. Cornea and S. Guggenheim, eds, Anthropological Approaches to Involuntary Resettlement: Policy, Practice and Theory, Westview, Boulder, CO, (in press); J. Zatz, 'Programmes de maitrise de l'energie au Bresil', UNEP Industry and Environment, Vo[ 13, No 1, 199[), pp 12-16. 12H.S. Geller, End-use Electricity Conservation: Options for Developing Countries, World Bank, Energy Department Paper 32, Washington, DC, 1986; H.S. Gcller, 'Electricity conservation in Brazil: potential and progress', Energy, Vol 13, No 6, 1988, pp 469-483; H.S. Gcller, Electricity Conservation in Brazil, American Council for an Energy-Efficient Economy, Washington, DC, 1990. 13J.A. Adam, "Extracting power from the Amazon', IEEE Spectrum, Vol 25, No 8, 1988, pp 34-38; op cit, Ref 11, Eletrobras (3); Eletrobras, Piano decenal 1990-1999, Eletrobras, Grupo Coordenador de Planejamento dos Sistemas Eletricos (GCPS), 1989; J. Goldemberg and M.N. Barbosa, eds, Amazonia: Facts, Problems and Solutions, Universidade de Sao Paulo, Sao Pau[o, 1989. 14R. Goodland, Environmental Assessment of the Tucurui Hydroproject, Rio Tocantins, Amazonia, Eletronorte, Brasilia, DF, 1978; R. Goodland, 'The World Bank's new environmental policy for hydroprojects', International Environmental Affairs, Vol 2, No 2, 1990, pp 109-129; R. Goodland, "BIRD: exigencias para preservar a vida', Sao Paulo Energia, Vol 7, No 62, 1990, pp 20-24; R. Goodland, 'The World Bank's new environmental policy for dams and reservoirs', Water Resources Development, Vol 6, No 4, 1990, pp 226-239; R. Goodland, in M. Mcsquita and Di Genio, eds, Politico ambiental do BIRD sobre hidreletricas, Universidade Paulista, Sao Paulo, 1991. ~P.M. Fearnside, "Brazil's Balbina dam: environment versus the legacy of the Pharaohs in Amazonia', Environmental Management, Vol 13, No 4, 1989, pp 4[11-423; R. Gribel, 'The Balbina disaster: the need to ask why', The Ecologist, Voi 2(), No 4, 1990, pp 133-135; op cit, Rcf 7, Moreira; Sao Paulo Energia, 'Balbina: obra discutivel mas agora irreversive', Sao Paulo Energia, Vol 5, No 44, 1988, pp 33-36; 'Balbina: economia do petroleo na Amazonia, Rio de Janeiro', Visao, 16 July 1986, pp 30-33. ~6R. Goodland, 'Environmental aspects of hydroelectric power and water storage projects', Roorkee UNESCO/UNEP International Conference on Environmental Aspects of Water Projects III, Roorkee, UP, 1985, pp 1-30; R. Gondland, 'Environmental aspects of hydroprojects', hldian Journal ~]" Public Administrution, Vol 35, No 3, 1989, pp 607-633: R.K. Pauchauri, Emissions of Greenhouse Gases in Developing Countries: Abatement Strategies and Perspectives, World Bank, PRE Energy Department, Washington, DC, 1990; R.K. Pachauri, "Energy efficiency and conservation in India', Industo~ and Environment, Vo[ 13, No 2, 19911, pp 19-24; R.K, Pachauri, 'Energy efficiency in developing countries: policy options and the poverty dilemma'. Natural Resources Forum, Vol 14, No 4, 1990, pp 31%325. 170p cit, Ref 14, Goodland 1990 (3).

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