Friday, December 08, 2006

Economics of dams in Brazil

For reasons that would take too long to explain, I have been reading a great deal about Dams recently and their implications for growth and the environment. The economic arguments for and against and fairly standard - there are winners downstream and some upstream but also plenty of losers. The losers, theoretically could be compensated by the winners, but as we know, this is a rare occurrence. Moreover, how does one value the loss of ones home, village and livelihood.

Try picking the winners and losers from this lot.

Many of the economic arguments are contained within the following article. I pull out just a few of the main points.

Amazon Dam Project Draws Heated Opposition in Brazil

RIO DE JANEIRO, Brazil - Rubber tappers, fishermen and Indians in western Brazil have joined environmental groups in battling a planned US$9 billion hydroelectric project that will flood one of the Amazon's main tributaries.


At hearings near Porto Velho, capital of the remote western Brazilian state of Rondonia, the government said the project would help avert a possible energy shortage, bolster the sluggish economy and allow barges to carry soybeans, timber and minerals on the 4,200 kilometer (2,800 miles) river network.

But environmental activists warned the dams would flood vast areas, including parts of Bolivia and Peru; spread malaria and other water-borne diseases; and destroy migrating fish, bird and animal wildlife and swathes of rainforest.

Officials in nearby Bolivia have grown concerned, demanding full details and vowing to seek compensation for any flood damage. Satisfying their concerns could take months.


"This project will redeem the region from backwardness," said Aldo Rebelo, a leading congressional ally of President Luiz Inacio Lula da Silva who is seeking reelection as president of the lower chamber.

Rebelo told a seminar in Brasilia last month that rich foreign countries, which had already destroyed their own forests, were using environmental protection as a weapon to slow agricultural expansion in countries like Brazil.

He said opposition from foreign-financed nongovernmental organizations (NGOs) made it hard for Brazil to carry out infrastructure projects.


The Ibama spokeswoman said people at public hearings asked about compensation for thousands forced to relocate by the dam project, and how authorities would handle the influx of outsiders seeking work while providing jobs for locals.

Other concerns included how the project would affect fishing, health and sanitation.


He said the project's backers estimated Brazil could raise soybean output by 25 million tonnes a year, or nearly 50 per cent, by farming the Amazon and the surrounding savanna.

But Switkes warned that the Madeira is one of the world's muddiest rivers, carrying four times as much mud as the Mississippi. He said a build-up of sediment could clog the hydroelectric turbines, causing the Jirau dam to overflow and flood part of Bolivia.


National Institute for Amazon Research (INPA) scientist Bruce Forsberg estimated that the flooded area could be double the initially envisaged 530 square kilometers and stretch across the border into Bolivia.

Smeraldi said the government was like an ostrich, burying its head in the sand and refusing to consider the full economic, social and legal implications for a huge area including northeast Bolivia, eastern Peru, western Mato Grosso and southern Amazonas.

Uncertainty about the project could discourage private investors the government is counting on for financing and management expertise.

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