In the Mekong region, plans for extensive hydropower development and regional power trade are underway with implications for existing uses of river resources and transboundary water governance. Growing regional demand for electricity, along with inflated forecasts of future demand, volatile prices in international energy markets, and the promotion of “clean” energy sources, have intensified interest in hydropower development. The region’s largest power markets – Thailand, Vietnam and Southern China – have largely developed their domestic hydropower resources and are looking towards hydroelectricity imports from neighbouring Laos, Cambodia and Myanmar. In turn, these countries see hydropower development as a means of generating state revenue and export income, attracting foreign investment and supplying domestic energy needs. The emerging importance of private sector financing has been key to facilitating the rapid development of hydropower in the region, representing a significant shift away from conventional public financing through the international development banks whose social and environmental safeguards have at times frustrated governments keen to get projects off the ground.

Key reform issues:

  • Better accounting of environmental and social costs of large hydropower dams, including cumulative and transboundary impacts
  • Benefit-sharing mechanisms to ensure a more even social and spatial distribution of costs, benefits and risks of hydropower dams, including fair compensation for lost land and livelihoods
  • Availability of channels for meaningful public participation in decision-making over hydropower projects and power development options
  • Greater openness and transparency in the planning, implementation and operation of dams
  • Meaningful application of environmental and social safeguard policies at national and transboundary level among state agencies and private sector actors
  • Systematic and integrated approach to energy planning and water governance at national level and with a basin-wide perspective
  • Access to justice in water governance and its application on transboundary rivers, including reparations for impacts of existing hydropower dams

Current critique and debate:

The notion of dams as an appropriate route to development has been debated and critiqued in the Mekong region since at least the 1950s, but the issue gained prominence in the 1990s when the Asian Development Bank first began to promote its vision of regional power trade and hydropower-fuelled regional economic growth. Hydropower dams are controversial because they result in large-scale alterations of rivers’ hydrology, sediment, fisheries and other ecosystems that negatively impact the lives and livelihoods of communities, including those located across national borders. Moreover, they often require resettlement of populations. Proponents argue that hydropower can be developed in a sustainable way through the application of international standards and good governance mechanisms to meet the region’s energy needs and as a source of revenue that contributes to poverty alleviation. Critics, on the other hand, argue that hydropower dams produce unacceptable trade-offs due to their high environmental and social costs, which are disproportionately borne by the region’s poor and marginalised populations. They contend that alternative technologies offer cheaper and more environmentally and socially sustainable options for meeting the region’s energy needs.

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