The report says building dams on the Mekong River poses a risk to regional industries

The report says building dams on the Mekong River poses a risk to regional industries

  • A new report from the World Wide Fund for Nature highlights how vital regional supply chains that rely on a healthy, connected Mekong River are being undermined by hydropower development.
  • Recent decades have seen the construction of dozens of hydropower dams on the Mekong River system, including 13 large-scale projects spanning the river’s main channel, with hundreds more either planned or under construction.
  • The report examines how the economic value of hydropower in the Lower Mekong Basin is measured against the high economic trade-offs of five key sectors that support regional economies.
  • The report makes recommendations for governments, investors and companies to understand the true cost of hydropower and mitigate the inevitable risks they face over the coming decades.

According to a new report from WWF, vital industries and supply chains worth billions of dollars are threatened by impacts from hydropower development along the Mekong River.

The report reveals how continued hydropower development along a major waterway threatens future economic growth in five vital sectors that support regional economies: energy production; Fisheries and aquaculture; rice production; Sand and construction. Textiles and electronics.

“The health of the Mekong River is inextricably linked to multiple local 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 focus on a more sustainable and balanced approach.”

Fishermen in Thailand
Fisheries, on which millions of people depend for their livelihoods and nutrition, are among the key sectors covered in the WWF report. Photo courtesy of Kelsey Hartman/WWF-Greater Mekong

More than 160 hydroelectric dams operate along the Mekong River and its tributaries, which together drain an enormous basin spanning six countries. Despite widespread criticism over their impact on the environment and traditional livelihoods, hundreds of other dams are either planned or under construction.

“Preserving the ecological integrity of the Mekong River system has been overshadowed by the desire for a narrow vision of economic growth,” the report says. “With development decisions moving at a rapid pace, often with limited or no system-wide integration or planning, the past 40 years have seen significant degradation of the Mekong River.”

Dwindling fishing catches, unprecedented riverbank erosion, collapsing flooded forests, and a sinking delta are just some of the challenges facing Mekong communities, businesses and policymakers.

Through a broader analysis of the significant economic risks and trade-offs for the industry in Lower Mekong Basin countries such as Cambodia, Laos, Thailand and Vietnam, the report provides recommendations to help policymakers and businesses understand the true cost of hydropower and mitigate the risks it may entail. confrontation over the coming decades.

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The Mekong River drains a basin spanning six countries, supporting ecosystems, biodiversity, vital regional supply chains and industry. Image courtesy of Thomas Cristofoletti/WWF-UK

“We need a change in mindset” about hydropower decision-making, Mark Guichot, WWF’s freshwater officer for Asia-Pacific and a contributor to the report, told Mongabay. “Hydropower projects are still not being properly evaluated along the Mekong River, and the full consequences are still unclear to decision-makers.”

While the logic of promoting hydropower to support the growing energy demand for the region’s growing economic development is sound, the broader and cumulative economic trade-offs of “much larger” industries, both regionally and globally, must be taken into account, Guichot said.

The expected economic value of hydropower investments in the Lower Mekong Basin is $33 billion, according to a 2017 study from the intergovernmental Mekong River Commission. But this number, while significant, pales in comparison to Vietnam’s economic activity in textiles and electronics alone, which the WWF report puts at $200 billion.

The report also highlights that the fisheries and aquaculture industry is one of the most affected sectors. Fisheries in the lower Mekong region, on which millions of people depend, face a potential decline of 30% to 40%, with financial losses estimated at $21 billion. Lake Tonle Sap in Cambodia alone faces production losses of 40 to 57 percent by 2030, with potential total losses to the country’s fisheries exceeding $3 billion annually.

The Mekong Delta in Vietnam is existentially threatened by erosion caused by the lack of sediment flowing from stretches of the river. Yields of important rice that form the backbone of agricultural livelihoods in the delta are also expected to decline due to soil degradation and saltwater intrusion caused by a lack of sediment upstream, the report says. The resulting need for increased fertilizer will lead to higher export prices, with implications for food security in other parts of the world.

According to the report, the most affected countries are Vietnam and Cambodia, due to their severe exposure to sediment loss, river fragmentation, and consequences for key supply chains, such as the need for more stringent regulation of overfishing and easing reductions in fishing. Soil fertility, stability of agricultural fields, and exposure of industries to water shortages.

The Mekong Delta is an agricultural powerhouse, often called the rice bowl of Southeast Asia, but a lack of sediment flow caused in part by hydroelectric dams is undermining the delta’s very existence. Photo courtesy of Cham Team/WWF-Vietnam

The report also says Laos’ energy sector is particularly vulnerable to the impacts of climate change due to its reliance on hydropower, which faces dry-season power shortages and mounting debt linked to droughts that scientists predict will increase in the coming decades.

Although much of the energy generated along the Mekong River feeds local grids, deals are increasingly being concluded to export energy outside the region, to countries such as Malaysia and Singapore. Given the wide-ranging impacts of hydropower, the report says many questions remain for these foreign buyers about whether the electricity they purchase is actually as environmentally and financially low-cost as investors believe.

The report says Singapore faces reputational risks in continuing to support hydropower from the Mekong River, undermining the city-state’s position as a sustainability leader among member states of the Association of Southeast Asian Nations (ASEAN).

“Singapore is trying to be first-in-class in terms of sustainability in ASEAN,” Guichot said, adding that in addition to its recent electricity purchases from Laos, Singapore has also increased its food imports from the Mekong region. Given that export prices of rice and other products from the Mekong region are rising, partly due to the effects of dams, Guichot said that doesn’t add up.

“If you connect (Singapore’s) agendas – food dependence, sustainable investment, clean energy, being a champion of sustainability in ASEAN – and if you put it all together, does it still make sense for them to buy electricity from the Mekong?” Guichot asked.

Rice in Vietnam
Important rice yields in Vietnam’s Mekong Delta are expected to decline further as soil degradation and saltwater intrusion result from a lack of sediment upstream. Photo courtesy of Cham Team/WWF-Vietnam

The report details several recommendations for governments, investors and companies to help them assess where priorities should lie. These include adopting a system-wide approach to planning along the river; Assessing the region’s huge potential for alternative renewable energy sources such as solar and wind; Assessing the true costs of hydropower developments in terms of environmental, social and reputational consequences; Reconsidering interregional electricity trade agreements; Enforce stricter environmental regulations and responsible business practices; and conduct further research into the risks associated with hydropower in specific supply chains.

Although the findings underscore the need to reconsider hydropower development in the future, it is important to acknowledge the challenges of balancing economic progress with and environmental responsibility, especially for countries like landlocked, river-rich Laos, where hydropower looks like a tempting path to debt relief.

Carlis and her colleagues encourage Lao policymakers to consider viable and more sustainable alternatives to hydropower, such as agriculture and ecotourism, to generate much-needed foreign exchange revenue.

Guichot said he hopes the report will encourage policymakers, investors and companies to question future hydropower development plans along the river. He added that companies 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 River has implications beyond the Mekong River,” Guichot said. “If it affects one (part of) the supply chain, it can affect millions of people who depend on it. That’s the world we live in.”

Mekong Hydroelectric Dam
The hydroelectric dam spans part of the Mekong River. Photo courtesy of Adam Oswell/WWF-Great Mekong.

Caroline Kwan is a staff writer at Mongabay. Follow her on 𝕏 @CarolineKwan11.

Banner image: Farmers move through a canal in rice fields in Vietnam. Photo courtesy of Cham Team/WWF-Vietnam

the quote:

Intraloan, A., Smajl, A., McConnell, W., Ahlquist, D. B., Ward, J., and Kramer, D. B. (2019). Review of benefits and costs evidence for hydropower development from the lower Mekong River Basin. Water Wires, 6(4). doi:10.1002/watt2.1347

See related story:

Strong river management is key to restoring the Mekong’s vitality in the face of dams

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