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New energy, the economy, and the environment

Giulio Boccaletti

Giulio Boccaletti

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 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 whenever dams are installed. Barriers that restrict the flow of water can be disruptive to inland fisheries, for example. More than six million tons of fish are harvested annually from river basins with projected hydropower development. Without proper planning, these projects could jeopardize a key source of food and income for more than 100 million people.

A better way

There is a better way.

By taking a system-wide 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, while at the same time ensuring that a community’s energy needs are met. The Nature Conservancy has pioneered such a planning approach — what we call “Hydropower by Design” — to help countries realize the full value within their river basins. Our research shows that these services add an estimated US$770 billion annually to the global economy. Failure to design dams to their fullest potential, therefore, carries a significant cost.

In the past, some developers have been resistant to this sort of strategic planning, believing that it would cause delays and be expensive to implement.

But, as the 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, for developers and investors, 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 sited 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. With nearly US$2 trillion of investment in hydropower anticipated between now and 2040, the benefits of smarter planning represent significant value.

System-scale hydropower planning does not require builders to embrace an entirely new process. Instead, governments and developers can integrate principles and tools into existing planning and regulatory processes. Similar principles are being applied 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 kilometers 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. 


Giulio Boccaletti is Chief Strategy Officer and Global Managing Director for Water at The Nature Conservancy. Copyright: Project Syndicate, 2017.

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