Dardanelos, Part 2: Tragedy Not Erased by CDM Botox

Zachary Hurwitz
Lula Gets Botox Treatment
Lula Gets Botox Treatment
Revista Veja

Read part 1 of this blog.

Have you ever known someone who has had botox? In the procedure, needles are stuck in your face and a bacterial neurotoxin byproduct – basically, botulism – is injected under your skin. And away go the wrinkles. The Brazilian hydro industry has been injecting plenty of botox into inviable projects in the hopes of giving grandfathered dams a nice clean, green sheen.  However, sometimes, despite how much botox is applied, some wrinkles just won't go away.  

In 2006, energy company Aguas de Pedra submitted a project design document to the United Nations Framework Convention on Climate Change (UNFCCC) in the hopes of qualifying the Dardanelos hydro project (261 MW) for Certified Emissions Reductions (CERs): carbon credits.  The company, composed of Neoenergia (Brazilian pension fund Previ and Spanish electric utility Iberdrola) (51%) and Eletrobras (49%) – who are also participating in financing Belo Monte Dam – claims that the dam would reduce an estimated 300,853 tons of CO2 equivalent per year over the first seven of its planned 35 years of operation. The dam project is currently in the verification stage of the Clean Development Mechanism (CDM) program of the convention.  

Unfortunately for Aguas de Pedra, Dardanelos does not meet the most significant of the CDM criteria: additionality. Leonor Mendes of the Universidade Federal de Mato Grosso noted as such during the project's comment period, published on the UNFCCC site. He wrote,

"Dear UNFCCC team,

I would like to call the attention that the Dardanelos Hydro Power project is well known among specialists of the power sector in Brazil as one of the “Botox” hydro power plants. This expression comes from the fact that those projects represent old projects which have been previously conceived, but ended up being treated as brand new projects by the Brazilian regulatory framework."
Construction of Dardanelos Hydro Project
Construction of Dardanelos Hydro Project
Aguas da Pedra

Mendes is right. Dardanelos does not meet the criteria of additionality because plans to construct the dam existed before the CDM came into operation in the year 2006. In 2004, Odebrecht and Eletronorte elaborated the environmental impact assessment for the project, which they submitted in December of the same year to the now-defunct Fundação Estadual de Meio Ambiente (FEMA) of the state of Mato Grosso. A public consultation was canceled by the federal public defender, who signaled incompetence at FEMA to grant an environmental license for the dam. In 2005, FEMA was disbanded after the federal investigation Operação Curupira uncovered the illegal granting of logging licenses at the agency. A new state environmental agency, Secretaria Estadual de Meio Ambiente (SEMA), was organized in 2005. New public consultations were called for, and then canceled by the state public defender, who pointed to irregularities within the project's impact assessment.  

Nonetheless, SEMA granted an environmental license, and financiers began to throw money at the project. After the CDM came into being in 2006, Neoenergia met with Norwegian foundation Det Norske Veritas to discuss the possibility of obtaining CDM funding. The national development bank BNDES then granted a R$283 million loan to Neoenergia to finance Dardanelos in 2008.

Aripuanã River, Mato Grosso
Aripuanã River, Mato Grosso
Tuko Dias

Now, recent dam tragedies such as Aguas da Pedra's destruction of an Arara tribal cemetery at the Dardanelos construction site, and the subsequent occupation of the dam by 11 indigenous tribes, illustrate that no amount of greenwash can compensate for age-old malpractices in the hydro industry's writing of dam impact assessments and the government's granting of environmental licenses. The wrinkly irregularities of Aguas da Pedra's impact assessment have come tragically back to the surface despite the clean sheen the project attracted.

The answer for the dam industry and its financiers is not more botox solutions like the CDM. The answer for companies is a diet of strict oversight to uncover and address their short shrift of impact analyses. The answer for BNDES is a steady schedule of exercise to strengthen the transparency of decision-making mechanisms for loan approval and adopt more comprehensive, binding, socio-environmental safeguards.  

The dam industry's aging practices need a healthy workout, not plastic surgery. The longer they wait to address their systemic symptoms, the more violent and unstable mistakes like Dardanelos may become.