Large Dams Just Aren't Worth the Cost

Large Dams Just Aren't Worth the Cost
Opinion - Jacques Leslie
The New York Times, August 22, 2014
nyti.ms/1poPZdC

THAYER SCUDDER, the world's leading authority on the impact of dams on
poor people, has changed his mind about dams.

A frequent consultant on large dam projects, Mr. Scudder held out hope
through most of his 58-year career that the poverty relief delivered by
a properly constructed and managed dam would outweigh the social and
environmental damage it caused. Now, at age 84, he has concluded that
large dams not only aren't worth their cost, but that many currently
under construction "will have disastrous environmental and
socio-economic consequences," as he wrote in a recent email.

Mr. Scudder, an emeritus anthropology professor at the California
Institute of Technology, describes his disillusionment with dams as
gradual. He was a dam proponent when he began his first research project
in 1956, documenting the impact of forced resettlement on 57,000 Tonga
people in the Gwembe Valley of present-day Zambia and Zimbabwe.
Construction of the Kariba Dam, which relied on what was then the
largest loan in the World Bank's history, required the Tonga to move
from their ancestral homes along the Zambezi River to infertile land
downstream. Mr. Scudder has been tracking their disintegration ever since.

Once cohesive and self-sufficient, the Tonga are troubled by
intermittent hunger, rampant alcoholism and astronomical unemployment.
Desperate for income, some have resorted to illegal drug cultivation and
smuggling, elephant poaching, pimping and prostitution. Villagers still
lack electricity.

Mr. Scudder's most recent stint as a consultant, on the Nam Theun 2 Dam
in Laos, delivered his final disappointment. He and two fellow advisers
supported the project because it required the dam's funders to carry out
programs that would leave people displaced by the dam in better shape
than before the project started. But the dam was finished in 2010, and
the programs' goals remain unmet. Meanwhile, the dam's three owners are
considering turning over all responsibilities to the Laotian government
- "too soon," Mr. Scudder said in an interview. "The government wants to
build 60 dams over the next 20 or 30 years, and at the moment it doesn't
have the capacity to deal with environmental and social impacts for any
single one of them."

"Nam Theun 2 confirmed my longstanding suspicion that the task of
building a large dam is just too complex and too damaging to priceless
natural resources," he said. He now thinks his most significant
accomplishment was not improving a dam, but stopping one: He led a 1992
study that helped prevent construction of a dam that would have harmed
Botswana's Okavango Delta, one of the world's last great wetlands.

Part of what moved Mr. Scudder to go public with his revised assessment
was the corroboration he found in a stunning Oxford University study
published in March in Energy Policy. The study, by Atif Ansar, Bent
Flyvbjerg, Alexander Budzier and Daniel Lunn, draws upon cost statistics
for 245 large dams built between 1934 and 2007. Without even taking into
account social and environmental impacts, which are almost invariably
negative and frequently vast, the study finds that "the actual
construction costs of large dams are too high to yield a positive return."

The study's authors - three management scholars and a statistician - say
planners are systematically biased toward excessive optimism, which dam
promoters exploit with deception or blatant corruption. The study finds
that actual dam expenses on average were nearly double pre-building
estimates, and several times greater than overruns of other kinds of
infrastructure construction, including roads, railroads, bridges and
tunnels. On average, dam construction took 8.6 years, 44 percent longer
than predicted - so much time, the authors say, that large dams are
"ineffective in resolving urgent energy crises."

DAMS typically consume large chunks of developing countries' financial
resources, as dam planners underestimate the impact of inflation and
currency depreciation. Many of the funds that support large dams arrive
as loans to the host countries, and must eventually be paid off in hard
currency. But most dam revenue comes from electricity sales in local
currencies. When local currencies fall against the dollar, as often
happens, the burden of those loans grows.

One reason this dynamic has been overlooked is that earlier studies
evaluated dams' economic performance by considering whether
international lenders like the World Bank recovered their loans - and in
most cases, they did. But the economic impact on host countries was
often debilitating. Dam projects are so huge that beginning in the
1980s, dam overruns became major components of debt crises in Turkey,
Brazil, Mexico and the former Yugoslavia. "For many countries, the
national economy is so fragile that the debt from just one mega-dam can
completely negatively affect the national economy," Mr. Flyvbjerg, the
study's lead investigator, told me.

To underline its point, the study singles out the massive Diamer-Bhasha
Dam, now under construction in Pakistan across the Indus River. It is
projected to cost $12.7 billion (in 2008 dollars) and finish
construction by 2021. But the study suggests that it won't be completed
until 2027, by which time it could cost $35 billion (again, in 2008
dollars) - a quarter of Pakistan's gross domestic product that year.

Using the study's criteria, most of the world's planned mega-dams would
be deemed cost-ineffective. That's unquestionably true of the gargantuan
Inga complex of eight dams intended to span the Congo River - its first
two projects have produced huge cost overruns - and Brazil's purported
$14 billion Belo Monte Dam, which will replace a swath of Amazonian rain
forest with the world's third-largest hydroelectric dam.

Instead of building enormous, one-of-a-kind edifices like large dams,
the study's authors recommend "agile energy alternatives" like wind,
solar and mini-hydropower facilities. "We're stuck in a 1950s mode where
everything was done in a very bespoke, manual way," Mr. Ansar said over
the phone. "We need things that are more easily standardized, things
that fit inside a container and can be easily transported."

All this runs directly contrary to the current international
dam-building boom. Chinese, Brazilian and Indian construction companies
are building hundreds of dams around the world, and the World Bank
announced a year ago that it was reviving a moribund strategy to fund
mega-dams. The biggest ones look so seductive, so dazzling, that it has
taken us generations to notice: They're brute-force, Industrial Age
artifacts that rarely deliver what they promise.

Jacques Leslie is the author, most recently, of "Deep Water: The Epic
Struggle Over Dams, Displaced People, and the Environment."
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