- A new report from WWF highlights how vital regional supply chains that rely on a healthy and connected Mekong River are undermined by hydropower development.
- Recent decades have seen scores of hydropower dams built on the Mekong River system, including 13 large-scale projects spanning the river’s mainstream channel, with hundreds more either planned or under construction.
- The report looks at how the economic value of hydropower in the Lower Mekong Basin measures up against its high economic trade-offs for five key sectors that underpin regional economies.
- The report provides recommendations for governments, investors and businesses to understand the true cost of hydropower and mitigate the inevitable risks they face over the decades to come.
Crucial industries and supply chains worth billions of dollars are threatened by impacts from hydropower development along the Mekong River, according to a new report from WWF.
The report reveals how continued hydropower development along the major watercourse jeopardizes future economic growth in five vital sectors that underpin regional economies: energy production; fisheries and aquaculture; rice production; sand and construction; and textiles and electronics.
“The Mekong’s health is inextricably linked to multiple domestic and global supply chains, countless livelihoods, and the food security of more than 50 million people,” Lan Mercado, WWF Asia-Pacific regional director, said in a statement. “We must pivot towards a more sustainable and balanced approach.”
More than 160 hydropower dams operate along the Mekong River and its tributaries, which together drain an immense basin that spans six countries. Despite widespread criticism over their impacts on the environment and traditional livelihoods, hundreds more dams are either planned or under construction.
“Maintaining the environmental integrity of the Mekong system has been overshadowed by an appetite for a narrow conception of economic growth,” the report says. “With development decisions proceeding at pace, often with limited or no integration or system-scale planning, the past 40 years have seen a major degradation of the Mekong.”
Dwindling fish catches, unprecedented riverbank erosion, collapsing flooded forests, and a sinking delta are just some of the challenges facing the Mekong’s communities, businesses and decision-makers.
Through a broader analysis of the high economic stakes and trade-offs for industry in the Lower Mekong Basin countries of Cambodia, Laos, Thailand and Vietnam, the report provides recommendations to help policymakers and businesses understand the true cost of hydropower and mitigate the risks they face over the decades to come.
“We need a change in mindset” on hydropower decision-making, Marc Goichot, freshwater lead for WWF Asia-Pacific and a contributor to the report, told Mongabay. “Hydropower projects are still not being assessed properly along the Mekong, and the full consequences are still not clear to decision-makers.”
Goichot said that while the logic of promoting hydropower to support increased energy demands of growing economic development in the region is valid, the wider and cumulative economic trade-offs for “much larger” industries, both regionally and globally, must be taken into account.
Hydropower investments in the Lower Mekong Basin have a projected economic value of up to $33 billion, according to a 2017 study from the intergovernmental Mekong River Commission. But that figure, while significant, pales in comparison to Vietnam’s economic activity in textiles and electronics alone, which the WWF report cites at $200 billion.
The report also highlights that the fisheries and aquaculture industry is one of the hardest-hit sectors. Lower Mekong fisheries, upon which millions of people depend, are facing a potential decline of 30-40%, with estimated financial losses of up to $21 billion. Cambodia’s Tonle Sap Lake alone is facing 40-57% production losses by 2030, with overall potential fisheries losses for the country in excess of $3 billion annually.
The Mekong Delta in Vietnam is existentially threatened by erosion caused by a lack of sediment flowing from upstream stretches of the river. Crucial rice yields that form the backbone of delta farming livelihoods are also expected to drop due to soil degradation and saline intrusion caused by the lack of upstream sediment, the report says. The resultant need for increased fertilizers will lead to elevated export prices, with implications for food security in other parts of the world.
According to the report, the hardest-hit countries are Vietnam and Cambodia, due to their acute exposure to sediment loss, river fragmentation, and knock-on consequences for key supply chains, such as the need for tighter regulation of overfishing, mitigating reductions in soil fertility and stability in agricultural fields, and vulnerability of industries to water shortages.
The report also says that the energy sector in Laos is particularly vulnerable to the effects of climate change due to its reliance on hydropower, which faces dry-season power shortages and escalating debts associated with droughts that scientists predict will only increase in the coming decades.
Although much of the energy generated along the Mekong River powers local grids, increasingly deals are being struck to export power outside of the region, to countries like Malaysia and Singapore. Given the wide-ranging impacts of hydropower, the report says that many questions remain for such foreign buyers around whether the electricity they’re purchasing is in fact as low-cost environmentally and financially as investors think.
Singapore faces reputational risks in continuing to support hydropower from the Mekong, the report says, undermining the city-state’s standing as a leader of sustainability among member states of the Association of Southeast Asian Nations (ASEAN).
“Singapore is trying to be first in class for sustainability in ASEAN,” Goichot said, adding that in addition to recent purchases of electricity from Laos, Singapore has also scaled up its food imports from the Mekong region. Given that prices of rice exports and other products from the Mekong region are increasing, due in part to dam impacts, Goichot said it doesn’t add up.
“If you link [Singapore’s] agendas — dependence on food, sustainable investment, clean energy, and being champions of sustainability in ASEAN — if you take it all together, does it still make sense for them to purchase electricity from the Mekong?” Goichot asked.
The report details several recommendations for governments, investors and businesses to help them take stock of where priorities should lie. Among them are adopting a system-scale approach to planning along the river; assessing the region’s vast potential for alternative renewable energy sources such as solar and wind; evaluating the true costs of hydropower developments in terms of environmental, social and reputational consequences; reconsidering interregional electricity trade agreements; enforcing stricter environmental regulations and responsible business practices; and conducting further research into hydropower-related risks in specific supply chains.
Daphné Carliez, resilient rivers manager for WWF-Greater Mekong and a contributor to the report, said that although the findings underscore the need to reconsider future hydropower development, it’s important to acknowledge the challenges of balancing economic progress and environmental responsibility, especially for countries like landlocked and river-rich Laos, where hydropower seems like a tempting route to assuage debts.
Carliez and her colleagues are encouraging policymakers in Laos to consider viable, more sustainable alternatives to hydropower, such as agriculture and ecotourism, to generate much-needed foreign exchange revenue.
Goichot said he’s hopeful the report encourages policymakers, investors and businesses to question plans for future hydropower development along the river. He added that businesses should also consider investing in nature-based solutions to mitigate some of the river-related risks they will inevitably face in the future.
“What happens to the Mekong has implications beyond the Mekong,”Goichot said. “If you affect one [part] of a supply chain, then it can affect millions of people who depend on it. That’s the world we live in.”
Carolyn Cowan is a staff writer for Mongabay. Follow her on 𝕏 @CarolynCowan11.
Banner image: Farmers navigate a channel in rice fields in Vietnam. Image courtesy of Cham Team/WWF-Vietnam
Citation:
Intralawan, A., Smajgl, A., McConnell, W., Ahlquist, D. B., Ward, J., & Kramer, D. B. (2019). Reviewing benefits and costs of hydropower development evidence from the Lower Mekong River Basin. WIREs Water, 6(4). doi:10.1002/wat2.1347
See related story:
Robust river governance key to restoring Mekong River vitality in face of dams
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