In an apparent turnaround, the Brazilian government has signaled an end to the construction of large dams in the Amazon. If materialized, it will be a step worthy of imitation. Then the region, and the world, can move towards truly sustainable energy generation that respects the environment and human rights. 

2018 began with encouraging news for the energy sector, and for rivers and human rights in Latin America. A senior official with the Brazilian government signaled, in an interview with the newspaper O Globo, the beginning of the end of large dams in the Amazon nation. That statement is backed up by the notable absence of several of these projects in Brazil’s new Ten-Year Plan for Energy Expansion.

The about-face is particularly significant since Brazil is a world leader in the construction of large hydroelectric projects, which until a few months ago were relied on to meet the nation’s rising energy demands.

Between corruption and lack of financing

The decision is a response to various factors, including the social conflicts and environmental impacts that large dams have caused in the Amazon, and major opposition from indigenous communities and civil society organizations. In addition, these projects have involved high costs from the start and, as Edvaldo Santana, former director of the National Electric Energy Agency (ANEEL) told O Globo, they “end up costing much more, despite the licenses.”

Large dams have also been at the center of the largest corruption scandal in the history of Brazil, uncovered by the Lava Jato investigation, which went beyond borders to involve politicians and businessmen from 11 Latin American nations. The evidence gathered then prompted the initiation of Leviathan, a special investigation into the Belo Monte Dam due to the signs of high payments of bribes related to its construction.

All of the above is in addition to the requirements for environment licenses with which several projects have failed to comply. This is the case of Belo Monte, whose license has been suspended for months, and of the Tapajós Dam, who license was denied last year.

On the other hand, the Brazilian government announced the privatization of Electrobras, a public company with a fundamental role in the construction of these large infrastructure projects. With this and the economic crisis that has affected the ability of the Brazilian National Bank for Economic Development (BNDES) to support these mega-projects, the large dams have lost their primary sources of funding.

Therefore—and in the face of technological advances and clean energy alternatives—Brazil is beginning to leave behind large dams and take and important step towards truly sustainable energy, and development that respects human rights.

This advance could have an important impact on the entire American continent. It could begin a wave of change toward a more modern energy matrix, further removed from the increasingly obsolete large dams.

A necessary change

In the Amazon basin alone, more than 275 new large dams are planned, the majority in the Andean region. And hundreds more are lined up in Central America and Mexico. To echo Brazil’s announcement, these initiatives could incorporate adequate and comprehensive energy planning with serious cost and risk assessments. In these terms, Pablo Pedrosa, Executive Secretary of Brazil’s Ministry of Mines and Energy, told O Globo, “We are not willing to make moves to disguise the costs and the risks.”

Even global entities such as the International Finance Corporation (IFC), part of the World Bank Group, have experienced first-hand the financial, reputational and socio-environmental costs of inadequately evaluating large dam projects. In 2012, the IFC, through the Latin American Fund for Renewable Infrastructure, provided $15 million USD to fund the Santa Rita Dam, which was to be built on the Ictobay River in Alta Verapaz, Guatemala. At the end of last year, the entity’s accountability mechanism concluded that the investment had breached the IFC’s operational policies.  The project had failed to comply with the affected community’s right to free, prior and informed consent.

Although IFC management denied the findings of its accountability mechanism, the project has been suspended since 2013 and the indigenous communities of the area maintain their opposition to it.

Brazil’s recent decision reinforces the global trend of moving away from large dams. Over the last several years in the United States, large dams have been removed to rescue rivers and the benefits they provide, like wild salmon runs on the Snake River in Washington State.

Given this good start to the year, it will be essential to ensure the effective implementation of Brazil’s decision. And, following that example, perhaps other Andean-Amazonian countries will also move towards modernity, consider the real costs of large dams, and begin to promote better, cheaper energy alternatives that don’t sacrifice natural ecosystems and the communities that depend on them.