An interesting thing has come to light: the electricity company has submitted a single 1000+ page environmental assessment for the five-dam project, instead of five individual environmental assessments. This is a good thing because all the eggs are in one basket. The entire environmental assessment can be rejected for the whole five-dam project. This is a good thing because it creates the possibility of having an action on the dams project as a system of dams as opposed to a set of independently considered dam projects. One of the things that we have learned here is that Chile does not require environmental impact assessments to be done in series with other projects; each project can be done in independence of other projects. This this seems to my ecological/systems-thinking mind to be nonsensical. How, for example, can you determine the full costs and benefits to society without assessing the project in terms of its system; a new addition to a network? I would argue that you cannot do it; at least without a serious amount of serendipity.
The area around Patagonia is little-developed, and the addition of five major dams in the region (although these dams are not of the scale of Hoover Dam) will be a problem of future management and development of the region. Today, we talked about economic methods of examining environmental costs of projects. However, two questions came to mind that I don't think have been sufficiently been answered (at least to my rather limited knowledge).
The first question is whether or not contingent valuation (or other non-use measures) of a project are subject to a discount rate. If it is, then does it fit into the assumption that an environmental Kuznet's Curve will happen: people with a higher wealth level will have more environmental desires, and will take actions to minimize pollution or maximize environmental factor? Also, how can you set a discount rate on future society's behavior or choices? This feeds into a related problem: once massive infrastructure is on the landscape (complete with its supportive infrastructure), the cost-benefit analysis changes into one where the question shifts from, “Should we build the dam?” at the beginning of the project to, “Should we get rid of the dam?” at the end of the project.
The second question is how to assess costs of mitigating dam projects based on future changes in management unforeseen at the time of the initial benefit-cost analysis was done. For example, we know that the Grand Coulee Dam has gone through several iterations of water and environmental management goals. The addition of fish ladders and the barging downstream of salmon could not be conceived of when the dams were constructed in the 1930s. However, this is a current management strategy, costing millions of dollars. True, one could say that it is an analysis of cost (to provide fish transport) to the benefit (of having salmon runs) is valid by using current-day measures. However, I would contend that if these costs were to be assessed in the 1930s (and if current legal structures were in place, that The Great Depression wasn't happening, etc.) the Grand Coulee Dam would have been built in a different manner. However, these exact costs could not be foreseen. However, there should have been some sort of percentage cost that holds no discounting.
Finally, the Patagonia dams project is one of an international scale. The company proposing the project is a private Spanish company. Therefore, profits are taken outside the country, with no need to invest profits directly in the country. This bypasses the possible benefits that might be accrued under GDP growth than if the company was a Chilean one. In this case (and possibly with all cases of international private investment), GNP (gross national product) or NDP (net domestic product) should be the method of assessment, since these two measurements only look at product that are nation-bound (and therefore directly “invest-able” in the host country).
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