Untapped Potential

A biodiversity hotspot blessed with tropical rainforests and nearly 5 percent of all terrestrial species living on Earth, Costa Rica is held up today as a paragon of environmental virtue. With more than 50 percent of its land covered in some kind of forest, and as much as 30 percent officially cordoned off in the form of parks, reserves, and other protected areas, the “Green Republic”¹ features abundant forest conservation in tandem with “sustainable development,” its high score on the United Nations Development Programme’s Human Development Index matched only by its spot at the top of Yale’s Environmental Performance Index. Greener still, renewable sources provide more than 80 percent of the country’s electricity.

What environmental champions might find themselves rather less enthusiastic about, however, is that around 80 percent of this renewable generation, or roughly two-thirds of Costa Rica’s total electricity, comes from hydroelectric sources. In some ways, this figure should come as little surprise; hydroelectricity provides well over half of the world’s renewable energy supply and offers distinct advantages over other renewables. Unlike solar and wind, which are available only when the sun shines or the wind blows, hydropower is usually available around the clock and on demand.² Large hydroelectric projects also tend to generate fewer lifetime greenhouse gas emissions than other renewables and have by far the lowest average levelized cost of electricity in OECD countries among all renewable energy sources.

Figure 1: Global electricity generation by fuel, 1973–2010

Figure credit: IEA (2012)

Nevertheless, hydroelectric development has raised the ire of environmental and indigenous rights activists alike due to its considerable social and environmental costs, most notably in the form of human displacement and habitat disruption. But a closer look at Costa Rica not only demonstrates a case in which some of these impacts have been successfully mitigated, but also confirms that hydroelectric energy lies behind much of the country’s environmental preeminence — both directly, in providing energy that is abundant, clean, and cheap, and indirectly, in motivating an ethic of environmental protection and forest conservation. Indeed, the modern history of environmental protection in Costa Rica — its very identity as a “Green Republic” and its well-deserved reputation as a model of environmental sustainability — shows itself to be deeply intertwined with its history of hydroelectric development.

In light of the twin challenges of climate change and human development in the 21st century, Costa Rica’s history should prompt a more serious consideration of hydroelectricity in other rapidly developing countries, where the need for energy is the greatest, deforestation looms the largest, and hydroelectric potential remains woefully untapped. In Africa in particular, hydroelectricity has the capacity to at once foster energy access, promote environmental conservation, and fuel sustainable development. While hydroelectric development is not necessarily possible or even desirable in all contexts, the case of Costa Rica provides a preliminary model for when hydropower would in fact make very much sense.

1.

That hydroelectric energy is abundant, clean, and cheap should come as no great surprise. What is often overlooked, however, is the role hydroelectric development has historically played as an early and consistent impetus for conservation. Indeed, the importance of hydroelectric energy for environmental sustainability in Costa Rica goes well beyond its simply being an emissions-free source of two-thirds of the country’s electric power.

Electricity was introduced to Costa Rica in 1884 when the Costa Rica Electric Company illuminated 25 street lamps in San Jose. The country’s first hydroelectric power plants were built shortly thereafter, around the beginning of the 20th century, and hydroelectricity has provided an important source of power ever since. The beginning of the 20th century also witnessed the first systematic attempts in Costa Rica to protect the environment, including the enactment of the 1909 Fire Law, motivated in part by hydrological considerations, which restricted the use of fire to clear forested land. This and other early-20th-century environmental protection laws, however, lacked strong enforcement measures and did little to curb deforestation.

It was only after the establishment of the Second Republic at the end of 1948 that serious attempts at environmental protection got under way, when the new government headed by José Figueres Ferrer abolished the military — an act many have credited with freeing up funds for social services and environmental protection — and established the Costa Rican Institute of Electricity (Instituto Costarricense de Electricidad, or ICE), a public utility corporation charged with supplying electricity to the country. Recognizing the country’s hydroelectric potential, ICE decided to focus on hydropower, a strategy that would provide a strong impetus for forest conservation in Costa Rica in the years to come. “Understanding the importance of forest cover for ensuring the hydrologic needs of the ICE,” as Sterling Evans writes in The Green Republic: A Conservation History of Costa Rica, “the Figueres administration issued a decree in 1949 to establish a Forest Council to inventory forest resources and to protect forested watersheds from diseases and fires.”

Figure 2: Sources of electricity in Costa Rica

Figure credit: Granoff et al. (2015)

If the initial desire to satisfy “the hydrologic needs of the ICE” motivated early forest conservation in Costa Rica, the need to maintain hydroelectric power potential would continue to influence forest protection efforts in Costa Rica in the decades that followed, especially as deforestation continued apace. In 1967, the government set up a commission, which included ICE, to study the problem of unregulated deforestation and to prepare a draft forestry legislation proposal. In November of 1969, the Costa Rican Legislative Assembly passed the landmark Ley Forestal (Forestry Law), which launched several initiatives to establish a system of national parks and protected areas. Despite the designation of new national parks, however, deforestation in unprotected areas proceeded unhindered into the 1970s. A report to the Legislative Assembly in early 1976 found that the destruction of forests endangered watersheds and, consequently, Costa Rica’s hydropower potential, warning that the situation was “extremely critical” and that Costa Rica was in a “state of true ecological catastrophe.” Emphasizing the impact of “enormous clear-cuts” on watersheds and the prevalence of extensive forest fires, the report laid special emphasis on threats to both wildlife and hydropower potential.

Such findings in turn led to renewed and ultimately successful efforts to preserve Costa Rica’s forests. In 1977, the Costa Rican Legislative Assembly passed the National Parks Act, which turned the existing National Parks Department within the General Forestry Directorate into a separate National Parks Service.³ Between 1974 and 1978, nine new protected areas representing nearly 350,000 acres (nearly 3 percent of Costa Rica’s total land area) were added to the Costa Rican national park system. Among these was Corcovado National Park, the country’s largest at almost 105,000 acres. By 1982, approximately 1,033,000 acres of land, or 8.3 percent of the country, had been designated as conservation areas, and Costa Rica was well on its way to becoming the environmental success story it is today.⁴

But the desire to maintain hydroelectric power potential has not just influenced environmental conservation efforts in Costa Rica in a general way. There have also been many cases where forest areas were preserved because of their connection to specific hydroelectric projects. When development of the Arenal Hydroelectric Dam was undertaken in the late 1960s to generate electricity for northern Costa Rica, for instance, scientific studies classified the forests among the Monteverde region, including the Peñas Blancas Valley, as watersheds that merited protection. As a result, the area was included in the 35,000 hectares of national forest reserve designated in February of 1977 as, fittingly, the Arenal National Electric Energy Reserve.⁵ As a result of these efforts, by the 1980s, the Peñas Blancas Valley consisted almost entirely of primary closed-canopy forest.

It is clear that in Costa Rica, the perceived link between forest conservation and hydroelectric generation capacity served as a key component of the foundational narratives used to advance the cause of nature conservation in the country. Costa Rica’s history thus illustrates the ways in which hydroelectricity can provide both direct and indirect benefits, both energy provision and the development of an ethic of environmental protection, in developing countries. Even in Costa Rica, however, hydroelectric energy has not come without significant costs, and the social and environmental impacts associated with hydroelectric development today have left its future in the country uncertain.

2.

The disadvantages of hydroelectric development can be both social and environmental in nature. Environmentally, large dams permanently transform riverine ecosystems in significant ways. The construction of the Arenal Dam, for instance, turned at least four rivers into a freshwater lake ecosystem. The release of water from the reservoirs of large dams has also been shown to negatively impact downstream aquatic ecosystems, and because many of Costa Rica’s fish species migrate between fresh and salt water, or migrate long distances within freshwater, these disruptions have had a measurable impact on several species in the region.

The human cost can also be heavy, as large-scale hydroelectric projects are often accompanied by involuntary population displacements. According to a World Commission on Dams report, in 2000 as many as 40 to 80 million people had been displaced worldwide by the creation of large dams.⁶ Large as they are, these numbers still don’t convey the full magnitude of the human costs associated with involuntary displacements, as development tends to disproportionately affect isolated indigenous communities who have longstanding economic and cultural ties to the land, and who often lack the contacts and institutional experience necessary to work the system and take full advantage of the new job prospects and economic opportunities that hydroelectric projects open up.

In Costa Rica, the most prominent and negative cost of hydroelectric power projects has been the forced displacement of citizens living in the inundation areas of hydroelectric dams. Some official figures about dam-displaced people in Costa Rica are shown in Table 1.

Table 1: Official displacement figures for hydroelectric projects in Costa Rica

Data sources: Partridge (1993); Trujillo et al. (2012)

Sites for hydroelectric projects are determined largely by geographic and hydrologic considerations, and Costa Rica has been fortunate that such considerations have not yet necessitated the involuntary displacement of large numbers of people. The only project that has required substantial involuntary resettlement up until now has been the Arenal project, completed in 1980, for which resettlement was carried out relatively smoothly and painlessly. For the two communities relocated in the Arenal project — a village with a bank, primary school, and basic health facilities, and a community of people living on outlying ranches — ICE established an Inter-Institutional Task Force to aid in constructing new settlements, carrying out relocations, and fostering community building. Financial compensation packages were also distributed with the help of community leaders versed in family networks and preferences. During the first two or three years, those resettled did report difficulties, but economic development picked up soon after, and, according to anthropologist William Partridge of the Inter-American Development Bank, living standards surpassed those of the original communities within five years of the move. While it is important not to discount the hardships that accompany any involuntary resettlement, it is evident that the institutional framework established by the Costa Rican government and ICE minimized short-term burdens and provided for the development of long-term gains.

Although the social and environmental costs associated with hydroelectric energy in Costa Rica have proven manageable thus far, and the benefits, in terms of abundant clean energy, have been substantial, the future growth of hydroelectric energy in Costa Rica nevertheless remains uncertain. A large hydroelectric project known as Proyecto Hidroeléctrico El Diquís (El Diquís Hydroelectric Project), which has been in the planning stages for many years, has recently been stalled over social and environmental concerns. Designed to be the largest hydroelectric dam in Central America with a capacity of 631 megawatts, the El Diquís project, if implemented, would play a key role in Costa Rica’s clean energy future.

Figure 3: Total installed capacity in Costa Rica, with and without El Diquís

Figure credit: Carls et al. (2011)

Unlike other hydroelectric projects in Costa Rica, however, El Diquís impacts indigenous lands. While ICE has stated that indigenous people will not be displaced by the dam, a 2011 United Nations report by the special rapporteur on the rights of indigenous peoples found that “the indigenous peoples and organizations concerned generally believe that whatever consultations ICE carried out in the past were inadequate.” There are environmental concerns over El Diquís as well, particularly the potential effect of the dam on the Térraba-Sierpe National Wetlands, a site assigned international conservation importance under the Ramsar Convention, a 1971 intergovernmental treaty for the conservation and sustainable use of wetlands.

The stalemate over El Diquís illustrates some of the dilemmas, difficulties, and trade-offs involved in hydroelectric development. On one side of the equation, this project represents an abundant source of cheap, clean energy. A coal-powered plant of similar generating capacity would spew out 3.5 million tons of carbon dioxide, 7,000 tons of sulfur dioxide, and 3,300 tons of nitrogen oxides into the atmosphere every year. On the other side of the equation, El Diquís involves considerable human and environmental displacement. And though Costa Rica has historically shown that it has the institutional capacity and the procedural framework to successfully carry out dam-related resettlement, El Diquís represents a more daunting challenge, one that involves appropriation of land belonging to indigenous people who may lack the contacts and institutional experience necessary to benefit from new opportunities that open up.

As Costa Rica demonstrates, the question of socially and environmentally sustainable hydropower, as with any other energy source, ultimately comes down to strong institutions and responsible governance. Effective institutions and policies have enabled Costa Rica to achieve a remarkable symbiosis between human development and nature conservation so far, with hydroelectric energy serving as catalyst. Whether Costa Rica’s institutions and policies will be able to resolve the stalemate over El Diquís, however, remains to be seen.

3.

There is a further complication to any wholesale embrace of hydroelectric development. While hydroelectric energy was once considered to be entirely free of greenhouse gas emissions, dams in tropical regions especially have recently been shown to emit substantial quantities of greenhouse gasses, linked, in part, to the trees and other organic matter submerged in filling up their reservoirs. Specifically, research points to three main emissions pathways in hydroelectric dams: surface emissions of carbon dioxide, methane, and nitrous oxide; bubble emissions of methane from sediment, which result from the anaerobic decomposition of organic matter; and methane emissions at or near the turbine associated with turbulence in the flow of water.

While there seems to be broad scientific consensus that hydroelectric dams do contribute to anthropogenic greenhouse gas emissions in these ways, quantifying their emissions has become a matter of considerable scientific contention. Take the particularly heated and extended debate between Philip Fearnside of Brazil’s National Institute for Research in Amazonia and Luiz Rosa of the Federal University of Rio de Janeiro, for instance, which led the editors of the journal Climatic Change to issue a rather extraordinary editorial note on the declining “substrate for healthy scientific debate.”

Figure 4: Main processes for greenhouse gas emissions in dams

Figure credit: Demarty and Bastien (2011)

A review of 20 years of data on greenhouse gas emissions — compiled by various researchers from 18 hydroelectric dams (11 in Brazil, 4 in the Ivory Coast, and 1 each in French Guiana, Panama, and Australia) — found that, among Brazilian dams, greenhouse gas emissions ranged from 4.63 times worse (Barra Bonita) to 356 times better (Itaipu) than coal-fired power plants of comparable power output. This kind of variation in the data led to the conclusion that “at this time, no global position can be taken regarding the importance and extent of GHG emissions in warm latitudes” from hydroelectric dams. To complicate matters further, others have argued that hydroelectric dams can also act as anthropogenic carbon sinks, permanently sequestering carbon in their reservoir beds and thereby mitigating some of the effects of anthropogenic greenhouse gas emissions. This phenomenon, however, is even less understood than greenhouse gas emissions from hydroelectric projects.

What becomes clear from these studies is the great deal of variability regarding emissions from hydroelectric projects, with factors such as location, dam and powerhouse design, reservoir characteristics, and reservoir age (emissions are highest in the first few years) playing important roles. It does appear, however, that hydroelectric power plants with high energy density (i.e., lots of energy produced per unit of reservoir area) do indeed produce far fewer emissions than comparable power plants burning fossil fuels. Although a definitive scientific consensus on the extent of greenhouse gas emissions from hydroelectric power plants has not yet been reached, available research clearly shows that while some hydroelectric projects (especially smaller ones) may have comparable emissions to fossil fuel power plants, large hydroelectric projects with deep reservoirs and high energy density — including Arenal, Reventazón, and the proposed El Diquís project in Costa Rica — are environmentally beneficial from an emissions perspective.

4.

One part of the world with tremendous potential for building economical hydroelectric power plants with high energy density is Africa, which has a growing population with skyrocketing energy needs. Fortunately, many regions in Africa are endowed with the geographic and hydrologic characteristics necessary for such high-energy-density plants, making hydropower a serious candidate for energy development on the continent, where demand might otherwise be met by fossil fuel power plants spewing carbon dioxide into the atmosphere.

In large parts of Africa today, access to electricity remains extremely limited, with a significant proportion of energy use coming from traditional biofuels like firewood and charcoal. Besides being energy inefficient, many traditional biomass energy sources also cause indoor air pollution, leading to health problems of various kinds.⁷ The demand for firewood to satisfy the energy needs of a growing population also contributes to deforestation, a leading cause of biodiversity loss.

Figure 5: Percentage of population without access to electricity in Africa

Figure credit: IEA (2014)

Clearly, there are both environmental and human development arguments to be made for bringing modern energy, particularly electricity, to many millions of people in Africa. While renewables advocates have generally celebrated distributed sources, and particularly solar, as remedies to the dual problem of energy access and decarbonization in the developing world, hydroelectric energy remains the only clean energy alternative that is economically competitive with coal and gas in Africa. What’s more, Africa also maintains a substantial amount of untapped hydroelectric potential. As a result, as in Costa Rica, hydroelectricity offers Africa the promise of energy development in conjunction with environmental protection policies and initiatives, a win-win for the environment and human development in a continent slated to experience rapid growth for the remainder of the century.

Some such initiatives to develop Africa’s hydroelectric potential are already in the works. The largest is the Nile Basin Initiative (NBI), formally launched in 1999 and funded by the World Bank and other international agencies, covering ten countries (Egypt, South Sudan, Sudan, Ethiopia, Uganda, Kenya, Tanzania, Burundi, Rwanda, and the Democratic Republic of Congo) with a total population of nearly 500 million people. Its stated objective is “to achieve sustainable socio-economic development through the equitable utilization of, and benefit from, the common Nile Basin water resources,” and it includes a wide range of activities — including building out irrigation systems, providing flood and desertification control, setting up a region-wide electrical grid, and constructing thermal and geothermal power plants — in addition to the development of the hydroelectric energy potential of the Nile and its tributaries. Table 2 provides a sampling of some of the hydroelectric plants involved in this vast and ambitious initiative.

Table 2: Three of the many projects featured in the Nile Basin Initiative

Data sources: Nile Basin Initiative (2012); Nile Basin Initiative (2017); Showers (2011)

It is also interesting to note that the NBI features an environmental protection component, suggesting that hydroelectric development in Africa could play a similar role in motivating an ethic of conservation as it did in Costa Rica. The NBI has declared watershed management to be an important part of its efforts, and has reported that almost 1.7 million hectares are expected to come under improved agricultural and environmental management as a result of its involvement. While it is still too early to assess whether such commitments will lead to long-term environmental protection in the Nile Basin, a look at Rwanda, one of the countries included in the NBI, indicates that hydroelectric energy does have the potential to motivate a push for environmental protection.

In Rwanda, biomass accounts for about 85 percent of primary energy use, petroleum 11 percent, and electricity the remaining 4 percent, most of which comes from hydroelectric power stations fed by the Rugezi-Bulera-Ruhondo watershed in the highlands of Rwanda’s Northern Province. When reduced water flow through the watershed led to a crippling energy crisis in 2003–2004, the Rwandan government identified deforestation and soil degradation as two of the primary causes. As a result, a series of laws were passed in 2005 to protect the watershed and restore the Rugezi Wetlands, a Ramsar site and one of the headwaters of the Nile River Basin, which eventually led to an upturn in hydroelectric power generation. As Rwandan President Paul Kagame said in 2009:

In the case of the Rugezi Wetlands, resettlement of human population, removal of cattle, and tree planting [have] seen the resurgence of this national asset with multiplier effects on other socioeconomic sectors. Not only is the biodiversity recovering, so is the economic infrastructure that had previously ceased to operate. Today the hydropower plants supported by the Rugezi marshland are operating at nearly full capacity.

As in Costa Rica, Rwanda’s recognition that conservation plays an intricate and essential role in hydroelectric capacity has led to institutional efforts to promote both, motivating an environmental ethic in the process.

According to a 2013 African Development Bank report, Rwanda’s estimated hydropower potential stands at about 313 megawatts. At the end of 2012, its total installed capacity was only 64.5 megawatts.⁸ There is thus much potential in Rwanda for further development of cheap, clean, environmentally friendly energy in the form of hydroelectricity. The NBI is already involved in realizing some of this potential, and in March, construction began on the 80-megawatt Rusumo Falls Hydroelectric Project, one of the flagship projects of the NBI that will serve Rwanda, Tanzania, and Burundi.

But the most ambitious of the planned NBI projects is the Grand Inga Hydroelectric Project, located on the Congo River at Inga Falls. The proposed dam, with a price tag of $80 billion, is expected to create a generating capacity of 39,000 megawatts, the largest of any hydroelectric project in the world and nearly twice the capacity of the massive Three Gorges Dam in China. Notably, the Grand Inga is a “run-of-the-river” project and is expected to have only a relatively small reservoir, which precludes problems associated with large reservoirs like extensive inundation and major involuntary relocation of residents.

Figure 6: Africa’s hydroelectric potential

Figure credit: IEA (2014)

However, whether the existing institutions and governments involved will actually be able to implement such a complex project is an open question. Indeed, doubts such as these arise not only with regard to the Grand Inga project but also more broadly with regard to the NBI itself. In a region beset with conflicts, questions remain as to how much the ten countries in the NBI will be willing to cooperate with one another. Already, Egypt has expressed opposition to some of the upstream projects, fearing a significant reduction in its share of Nile water. Other difficulties might crop up as well — NBI-sponsored projects have not yet had to deal with large numbers of people displaced by dam construction, but some hydroelectric projects in the region have. In particular, the Merowe Dam near Khartoum in Sudan has displaced many thousands of people, possibly as many as 70,000.

The hope is that the promise of cheap, clean energy and regional economic development that the NBI represents will usher in a new era of cooperation and institution building in the region that will provide it with the capacity to manage the difficulties involved. With this, it is important to remember that the need for strong institutions is not peculiar to hydropower; rather, responsible governance underpins the success and equity of all forms of energy development.

In a world where drastically reducing greenhouse gas emissions and simultaneously satisfying a growing demand for energy have emerged as two of our most pressing priorities, hydropower offers a unique opportunity. While we should take heed of the social and environmental costs that come with hydroelectric development — both the disruption of local populations and habitats and the potential for greenhouse gas emissions — it is also important to recognize that all forms of energy production come with trade-offs. How to equitably and responsibly manage these trade-offs is a question that will fall to local stakeholders, governments, and the international development community. But what will be essential to recognize in that process is hydropower’s underutilized capacity to provide clean, cheap, abundant energy for the sake of both conservation and development. This potential has a considerable upside, especially in Africa, Asia, and South and Central America, where the need for both energy access and environmental protection remains paramount. In Africa in particular, significant, and untapped, hydroelectric potential abounds.