Hydro Developers Continue Efforts to Rip-Off the Climate

Payal Parekh

Bujagali Falls
Bujagali Falls
In the past month, International Rivers has submitted comments on the applications to the Clean Development Mechanism for two nasty hydro projects: Bugajali Dam in Uganda, and Bonyic Dam in Panama. Our local partners have been active in opposing these projects on environmental and social grounds.

Like most, if not all, of the 749 large hydro dams that have been approved to sell CDM carbon offsets, or have applied for approval, these dams will be completed regardless of receiving carbon credit income. They therefore should be ineligible for the CDM, which requires projects to be "additional," that is, the projects should only go forward because of the extra income they can get from the CDM. In the real world, CDM income is a very nice extra for hydro developers, but rarely if ever is it key to the decision to build the project.

The Bujagali Dam is clearly not additional – although its application for the CDM describes it as a "proposed" project, construction is well over half complete! International Rivers for years questioned the economic viability of Bujagali but were repeatedly assured by the World Bank, Ugandan government, and the project developer that it was by far the cheapest option for power in Uganda. But now that the project has received its financing and is nearing completion, the developers are telling the CDM that yes actually it is a terribly risky and expensive power project and that they're only investing in the US$860 million project because of the hope that they can get ten million dollars or so each year from the CDM.

The arguments made to indicate that the Bonyic Hydropower Project in Panama is additional and deserving of approval for the CDM are similarly laughable. The Project Design Document (PDD) claims that small hydropower is not common practice in Panama, despite the fact that there are 17 small hydropower plants in the country.

The project site is located within a nature reserve, of which the Naso people are the original inhabitants. Yet the PDD falsely claims that the site is not fit for habitation. Somebody forgot to tell the Naso!

Furthermore, the project developer, Colombian-owned Hidroecologica del Teribe (HET), fixed an election in order to get the approval of the Naso for the project. Construction began illegally and local people have been harassed by security guards hired by the project developer.

We'll be watching closely to see whether the certification company approved by the CDM to evaluate the applications for these projects takes our comments seriously and rejects the applications.

Unfortunately these reality-bending applications represent the rule, rather than the exception in the CDM. Even if our comments help stop Bujagali and Bonyic from being approved, many other non-additional projects get approved because of evaluator incompetence, lack of capacity and bias (they're selected and paid by the project developer), and because we and our partners do not have the ability to flag the scores of bad CDM projects. The only way to successfully put a stop to this climate scam is to scrap the CDM.

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