Hydroelectric projects in Bocas del Toro, Panama

A 2006 study by Cordero et al[1] outlines the environmental and social concerns associated with the four dam projects in the Changuinola-Teribe hydrographic basin. These include effects on La Amistad International Park, which is a prime area of biodiversity, and which forms part of a biological corridor between North and South America, meaning that ecological damage could be far-reaching. Access roads would expose La Amistad International Park to deforestation. Aquatic biodiversity would be affected over 704 kilometers of rivers, and aquatic species could be lost within a total area of 1,493 sq km.

The study estimated the gross value of greenhouse gas emissions (caused by deforestation) at $24.9 million, and the costs of attempts at transporting fish around the dams at $1.3 million. Environmental costs unaccounted for in the economic analysis include loss of biodiversity, thermal stratification of the reservoir water (unnatural temperatures, decreased oxygenation) and the loss of integrity of La Amistad National Park and the Palo Seco Protected Forest.

In terms of socio-cultural impacts, the people living in the region to be affected by the projects are primarily indigenous (Naso and Ngöbe peoples – refer to Ch.8). They live relatively autonomously and with subsistence economies, which would be undermined by the hydroelectric projects. Losses of $56.2 million were predicted for these groups, in association with compromised access to resources and the costs of changes in lifestyles.

A key finding of the analysis was the profound inequity in the distribution of costs and benefits.

This is a clear case of an investment that may well be economically efficient, but will be inequitable. This analysis shows that an energy company, lenders and the government will reap the benefits of the project, while the costs will fall disproportionately on particular indigenous communities and on the natural ecosystems surrounding them.[2]

Compensation is one way of mitigating such disparities, and the authors suggest that the profits generated by the projects would be sufficient to alleviate and compensate for some of the economic and environmental costs to the indigenous communities. However, they also note the lack of any satisfactory plan to do so.

[1]   Cordero, S., Montenegro, R., Mafla, M., Burgués, I., and Reid, J. (July 2006) ‘Análisis de costo beneficio de cuatro proyectos hidroeléctricos en la cuenca Changuinola-Teribe’, INCAE Business School, Alianza para la Cooperación y el Desarrollo, Asociación ANAI, and the Conservation Strategy Fund.
[2]  Ibid., p.11