Greenwashing hydropower: big dams have a serious record of social and environmental destruction, and there are many alternatives. So why are they still being built?

• Author: Imhof, Aviva

On a hot May day, a peasant farmer named Bounsouk looks out across the vast expanse of water before him, the 450-square-kilometer reservoir behind the new Nam Theun 2 dam in Laos. At the bottom of the reservoir is the land where he once lived, grew rice, grazed buffalo, and collected forest fruits, berries, and medicinal plants and spices. Now there is just water, water everywhere.

"Before the flood I could grow enough rice to feed my family and I had 10 buffalo," he says. "I like our new houses and I like having electricity in the new village, but we do not have enough land and the soil quality is very poor. Now I can't grow enough rice to feed my family, and three of my buffalo died because they didn't have enough food."

Bounsouk is one of 6,200 indigenous people whose lands were flooded to make way for the Nam Theun 2 Hydropower Project in this small Southeast Asian country. His story is one that is heard over and over again in the project resettlement area. People are generally happy with their new houses, electricity, and proximity to the road, but are concerned about how they will feed their families in the long term. The poor quality of land and lack of viable income-generating options in this remote area make their prospects bleak.

Big dams have frequently imposed high social and environmental costs and longterm economic tradeoffs, such as lost fisheries and tourism potential and flooded agricultural and forest land. According to the independent World Commission on Dams, most projects have failed to compensate affected people for their losses and adequately mitigate environmental impacts. Local people have rarely had a meaningful say in whether or how a dam is implemented, or received their fair share of project benefits.

But Electricite de France, Nam Theun 2's developer, together with the Lao government, the World Bank, and other backers, promised that Nam Theun 2 would be different. They called it a "poverty-reduction project." The company committed to restoring the incomes of affected communities, and the World Bank claimed that the cash-strapped Lao government would use the revenues from Nam Theun 2's electricity exports to neighboring Thailand solely to benefit the poor. These promises helped seal the deal, bringing in European development agencies, banks, and export credit agencies with hundreds of millions of dollars in grants, loans, and insurance for the US$1.45 billion project, the largest foreign investment ever in Laos.

But while Nam Theun 2's engineering deadlines have been met, social and environmental programs have stumbled ever since construction started, making life more difficult for Lao villagers. Legal agreements have been violated and social and environmental commitments have been broken. In a manner typical of hydro projects worldwide, promises were made prior to project approval that were later broken by project developers and governments.

Downstream, more than 120,000 people are waiting to see how their lives will be affected when the project starts operation in early 2010. They are likely to suffer the project's most serious damage, including destruction of fisheries, flooding of riverbank gardens, and water quality problems. Yet the programs to restore livelihoods in this area are badly underfunded and poorly planned.

Rather than being a new model of hydropower development, the experience with Nam Theun 2 to date only reinforces lessons learned from other large hydropower projects around the world. Instead of giving hope for the future, Nam Theun 2 threatens more of the same: broken promises, shattered lives, ruined ecosystems.

Hydro Boom

The dam building industry is greenwashing hydropower with a public relations offensive designed to convince the world that the next generation of dams will provide additional sources of clean energy and help to ease the effects of climate change. In some of the world's last great free-flowing-river basins, such as the Amazon, the Mekong, the Congo, and the rivers of Patagonia, governments and industry are pushing forward with cascades of massive dams, all under the guise of clean energy.

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Following a decade-long lull, a major resurgence in dam construction worldwide is now under way, driven by infusions of new capital from China, Brazil, Thailand, India, and other middle-income countries. In particular, Chinese financial institutions have replaced the World Bank as the largest funder of dam projects globally. Chinese banks and companies are involved in constructing some 216 large dams ("large" means at least 15 meters high, or between 5 and 15 meters and with a reservoir capacity of at least 3 million cubic meters) in 49 different countries, particularly in Africa and Southeast Asia, many with poor human rights records. A look at the heavy dam-building activity in China, the Amazon basin, and Africa illustrates the risks involved.

China. China is already home to more than 25,000 large dams, about half of the global total. These projects have forced more than 23 million people from their homes and land, and many are still suffering the impacts of displacement and dislocation. Around 30 percent of China's rivers are severely polluted with sewage, agricultural and mining runoff, and industrial chemicals, and the flows of some (such as the Yellow River) have...