Common Tragedies

Thoughts on Environmental Economics

Tradeoffs in energy: the Three Gorges Dam

Posted by Evan Herrnstadt on November 20, 2007

The Three Gorges Dam (TGD) has been a source of controversy in the environmental world since the project’s inception. However, it effectively embodies some of the tradeoffs inherent in energy production. As part of a series on “China’s epic pollution crisis”, the New York Times has an article outlining the consequences and tension surrounding the TGD.

The problem of balancing economic growth and development with carbon mitigation is not new, but China is a somewhat unique example due to its sheer size:

China’s insatiable appetite for energy is mostly being met with a building spree of coal-fired power plants. Coal accounts for 67 percent of China’s energy supply. Just last year, China added 102 gigawatts of generating capacity, as much as the entire capacity of France.

The goals of development and carbon mitigation can seem antithetical at times. The alternatives to fossil fuels are plagued with their own problems. Nuclear has issues with waste storage and proliferation. Wind turbines suffer from NIMBY siting issues. Solar is not yet competitive on a large scale.

China is attempting to increase renewable capacity to 15% by 2020, but forecasts predict renewables will be a mere 4 percent of China’s energy supply at that point. The nation plans to double nuclear capacity in that period as well; impressive as that sounds, it will still only comprise 4 percent of the total as well. As for hydropower:

Currently, China uses only about one-fourth of its hydropower potential…[hydro] already accounts for 6 percent of the power supply and has major growth potential. Chen Deming, one of the government’s top economic planners, said hydropower was a critical noncarbon energy source and described the negative impacts of dams as “controllable.” He said officials would emphasize environmental protection and resettlement issues on future projects.

This is great assuming that Chen’s vision becomes a reality. However, the TGD cannot possibly have created many optimists.  Problems such as faster-than-expected sedimentation, water pollution, increased erosion, and the potential for a catastrophic earthquake loom over the dam. This is not to downplay the human impacts:

Last year, Chinese officials celebrated the completion of the Three Gorges Dam by releasing a list of 10 world records. As in: The Three Gorges is the world’s biggest dam, biggest power plant and biggest consumer of dirt, stone, concrete and steel. Ever. Even the project’s official tally of 1.13 million displaced people made the list as record No. 10…

…Entire cities were inundated along with ancient temples and other landmarks. Today, many of the people resettled by the project are still struggling to survive.

Much of the energy from the dam goes to urban industrial use, bypassing the rural peasants that its generation has displaced. Current leaders have attempted to distance themselves from the environmental, political, social, and fiscal disasters of the TGD. The recent official concession that “environmental security” is the next challenge for the TGD project has stunned many critics, some of whom have been unsuccessfully protesting the project for two decades. Still, one must question the government’s plan for continued expansion of megahydro along the upper stretches of the Yangtze River.

So are the costs of megahydro worth the benefits of cheap industrial energy and carbon abatement? Assuming constant carbon intensity of production, if China’s economy continues to grow at even 5 percent for the next decade or two, it will be emitting roughly twice as much carbon as the United States does currently. One potential solution is to drop that initial assumption and really focus on energy efficiency. China was formerly notorious for inefficient energy use. As of 1990, it consumed seven times as much energy per unit GDP as did Japan due to a combination of outdated machinery and cheap, subsidized energy. However, by 2003, China’s energy intensity of production had been slashed roughly in half. So clearly this is already a strategy; whether it’s been mandated or simply occurred thanks to some market reforms, I’m not sure.

Another potential idea is a series of smaller hydro plants (1-3GW) along the Yangtze. These would likely have considerably smaller environmental and social impacts when compared with a monolithic facility like the TGD. Another attractive aspect of these smaller projects is that they go up more quickly and are less prone to enormous cost overruns and delay, a prospect that seems attractive after the construction headaches of the TGD project.

So China faces a major decision. How can it continue to pursue stratospheric economic growth while (hopefully someday) participating in a global scheme to reduce atmospheric carbon concentration? As in the US, the options are not always attractive, but the consequences of projects like the TGD are severe and must be examined in a serious cost-benefit framework. To illustrate:

In the isolated mountain villages above the reservoir, farmers have heard nothing about a new resettlement plan. For many farmers, the immediate concern is the land beneath their feet. Landslides are striking different hillsides as the rising water places more pressure on the shoreline, local officials say. In Fengjie County, officials have designated more than 800 disaster-prone areas. Since 2004, landslides have forced the relocation of more than 13,000 people in the county. Not too far from the dam itself, residents in the tiny village of Miaohe felt a major tremor in April beneath their farmhouses. Officials ordered them to relocate for three months into a mountain tunnel for lack of any other nighttime shelter.

Hey Ocean City — maybe those windmills on the horizon don’t seem so bad anymore, eh?

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