Energy, economics, and the environment

London—To secure a low-carbon future and begin to address the challenge of climate change, the world needs more investment in renewable energy. So how do we get there? No system of power production is perfect, and even “green” power projects, given their geographic footprint, must be managed carefully to mitigate “energy sprawl” and the associated effects on landscapes, rivers and oceans.

Hydropower offers one of the clearest examples of how the location of renewable energy infrastructure can have unintended consequences. Dam-generated electricity is currently the planet’s largest source of renewable energy, delivering about twice as much power as all other renewables combined. Even with massive expansion in solar and wind power projects, most forecasts assume that meeting global climate mitigation goals will require at least a 50-percent increase in hydropower capacity by 2040.

Despite hydropower’s promise, however, there are significant economic and ecological consequences to consider. For example, barriers that restrict the flow of water are disruptive to inland fisheries. Without proper planning, these projects could jeopardize a key source of food and income generation for more than 100 million people.

In many parts of Asia, Latin America and Sub-Saharan Africa, hydropower is an important source of energy and economic development. But free-flowing rivers are also essential to the health of communities, local economies and ecosystems. By some estimates, if the world completes all of the dam projects currently underway or planned without mitigation measures, the resulting infrastructure would disrupt 300,000 kilometers of free-flowing rivers—a length equivalent to seven trips around the planet.

There is a better way. By taking a system-scale approach—looking at dams in the context of an entire river basin, rather than on a project-by-project basis—we can better anticipate and balance the environmental, social and economic effects of any single project, at the same time ensuring that a community’s energy needs are met. The Nature Conservancy has pioneered such a planning approach—“Hydropower by Design”—to help countries realize the full value within their river basins.

Even dams that meet their power-generation goals, but planned in isolation, though they achieve their maximum strategic potential, not only often cause more environmental damage than necessary and fail to maximize the long-term value of other water-management services such as flood control, navigation and water storage—services that add an estimated $770 billion annually to the global economy. Failure to design dams to their fullest potential, therefore, carries a significant cost.

As Conservancy’s latest report—“The Power of Rivers: A Business Case”— demonstrates, accounting for environmental, social and economic risks up front can minimize delays and budget overruns while reducing the possibility of lawsuits. More important, employing a holistic or system-wide approach leverages economies of scale in dam construction. The financial and development benefits of such planning enable the process to pay for itself. Our projections show that projects using a Hydropower by Design approach can meet their energy objectives, achieve a higher average rate of return, and reduce adverse effects on environmental resources. Similar principles apply to wind, solar, and other energy sources with large geographic footprints.
Completing the transition to a low-carbon future is perhaps the preeminent challenge of our time, and we won’t succeed without expanding renewable-energy production. In the case of hydropower, if we plan carefully using a more holistic approach, we can meet global goals for clean energy while protecting some 100,000 km of river that would otherwise be disrupted. But if we don’t step back and see the whole picture, we will simply be trading one problem for another. Project Syndicate

Giulio Boccaletti is chief strategy officer and global managing director for water at Nature Conservancy.