European Parliament Urges World Bank Out of Large Dams
In a resolution passed last week, the European Parliament urged the World Bank to stay out of investing in large dams. While the resolution is non-binding, the request illustrated a growing concern over the social, environmental, and operating risks of hydroelectric dams with large reservoirs. In a world where climate change-related drought is increasing the tendency for river flow and reservoir capacity to reduce, the Parliament's resolution has struck a good tone.
The resolution was aimed at influencing the World Bank's current review of its Energy Strategy, a set of policy guidelines that will frame over the next few years the role that the Bank will play as an investor in energy development and climate change mitigation. These are roles that the Bank is increasingly hoping to play as it attempts to recapture some of the influence in the development lending industry that it has lost to new financiers, especially from China, Brazil, and other emerging markets.
The resolution expresses, among other concerns, that the European Parliament:
"Stresses the need to diversify the energy portfolio, given the problems arising from over-reliance on one energy source for power generation, such as imported fossil fuels or hydropower (where prolonged drought means empty reservoirs that dramatically reduce generating capacity);
"Urges the World Bank to scale up its investment in renewable energies and energy efficiency, but to refrain from investing in large hydroelectric projects, whose negative social and environmental impacts resulting inter alia from greenhouse gas emissions from reservoirs must be properly assessed prior to their financing;
"Underlines that small hydropower dams are more sustainable and economically viable than large hydropower facilities."
As civil society calls on the World Bank to phase-out or outright drop investments in fossil fuel-related energy, the Bank is postitioning itself to adopt an increasingly significant position as a major financier for climate mitigation, seeking to turn once more to investments in hydropower. In considering the role of hydropower in its Energy Strategy, the Bank has a responsibility, and a unique opportunity, to incorporate rigorous standards for dams in both direct lending and development policy loans.
International Rivers is preparing its own recommendations to the World Bank regarding its Energy Strategy revision, and will post these soon.