Why Latin America is Still Building Dams

Almost 15 years ago, the top official at the U.S. government's Bureau of Reclamation, which is responsible for building massive dams throughout the American West, declared that the "era of big dams is over." Deemed unsafe, overly expensive and disastrous to the environment, hydroelectric power was dismissed throughout the developed world as a relic. Today less than 10 percent of electricity generated in the United States comes from dams, and throughout the developed world the trend is toward the decommissioning of dams, not building new ones. Not so in the developing world, where officials still tout big dams as the best way to tackle future energy needs and combat global warming. "We don't have the luxury not to take advantage of energy-generating resources," said center-left Chilean President Michelle Bachelet last year in her annual address to Congress, "especially during a time of climate change, in which countries should be promoting the greater use of nonpolluting energy such as hydroelectricity."

But the moves toward hydroelectric power have stirred up a flood of protest. In Mexico, there is fierce opposition to the La Parota dam, a 765-megawatt project planned for the Papagayo River. In Guatemala, activists have worked to halt plans for three dams slated for a nature reserve in the country's Rio Hondo area. Similar conflicts simmer in Panama, Ecuador, Brazil and Paraguay, and in parts of Asia and Africa. Particularly controversial are plans for a $3.2 billion, 2,750- megawatt series of dams in pristine southern Patagonia, in Chile, which its many critics say will imperil one of the world's most spectacular natural areas and the region's tourism economy.

Opponents of such mega-hydropower plants say they not only drown farmland and villages, but often, especially along the lazy rivers of the low-lying tropics, produce energy at exorbitant cost. The 2000 World Commission on Dams found that the construction of large dams cost, on average, 56 percent more than originally planned. Nor are they necessarily environmentally friendly. Big dams can destroy wildlife habitat, and in the Ganges, in India, and the Nile, in Egypt, have trapped silt, causing extensive soil erosion and land loss downstream. Drought is another concern. Ten years ago, the worst drought in decades dried up reservoirs and left Chile, which depends on hydroelectric power for more than half its electricity, with power outages stretching three or more hours a day.

Yet the dams keep getting built. Their backers, in government and the private sector, argue there are few other cost-competitive alternatives. After the expensive investment required on the front end for construction, dams can potentially produce power at a relatively cheaper cost over time, they say. For countries like Chile, which don't have substantial gas reserves, big dams are also seen as a way to avoid dependence on volatile international gas markets. "The president and all our ministers say that to face our energy needs, and to do that sustainably, we have to use our main richness in terms of energy resources, and that is hydroelectricity," says Marcelo Tokman, Chile's Energy minister.

The governments in the developing world have gotten help from, of all places, China, which is now home to half of the world's 50,000 large dams, and is financing more than 80 dams in developing countries in part to improve its access to commodities. In April 2006, for example, Nigeria awarded China four oil-drilling licenses in exchange for a commitment to invest $4 billion in infrastructure.

Concern over global warming is also aiding new construction of large dams in the south. The Clean Development Mechanism (CDM), set up to help implement the United Nations' Kyoto Protocol, allows governments and companies to offset their negative contributions to climate change by financing dams because hydropower does not emit carbon dioxide. About 25 percent of projects considered for CDM funding are dams. Yet studies show that dams can produce significant quantities of methane, a greenhouse gas 21 times more effective at warming the atmosphere than carbon dioxide. In Brazil, where 80 percent of the grid is from hydro, many hydro plants are so inefficient they issue as much carbon dioxide and methane, from rotting vegetation, as a thermoelectric plant.

The defenders of Patagonia and other pristine natural environments threatened by big dams are now urging decision makers to reject hydroelectricity and push ahead with more ecologically palatable alternatives like solar, geothermal and wind. But for many Chileans—like many in the developing world—the ultimate decision on whether to send their wild rivers to oblivion will come down to how best to meet their hunger for energy in the years ahead.