The Current Status of Environmental Criteria for Hydropower Development in the Mekong Region A Literature Compilation by Peter King, Jeremy Bird, Lawrence Haas ` March 2007 Coordination and Editing: WWF/Marc Goichot WWF–Living Mekong Programme P.O. Box 7871. House. 39. Unit 05 Ban Saylom, Vientiane, Lao PDR Email: [email protected] Design and Layout: WWF/Noy Promsouvanh Cover photos: MRC/Jim Holmes, MRC/Garris on Photography, MRC/Virginia Adamson. Cover illustration: Phanavanh Anoulack The opinions and interpretations expressed within are those of authors and do not necessarily reflect the views of the Asian Development Bank, Mekong River Commission Secretariat and WWF. The Current Status of Environmental Criteria for Hydropower Development in the Mekong Region: A literature compilation Foreword Population growth, economic development, and associated increases in personal wealth are causing growth in electricity demand across the Greater Mekong region, if not uniformly within the different countries, still at an overall rapid rate for the region as a whole. Different sets of options are open to meet this demand – each with unique advantages and disadvantages - all of which become entangled in the complex play of diverging priorities supported by different interest groups. In the mean time, the recent recognition of the role of human activities on climate change is leading to rethinking of the entire energy sector. As a result, a complex paradigm lies in front of decision makers, touching on crucial issues such as global sustainability, national security/autonomy and key economic strategies. GMS electricity markets will obviously end up relying on a combination of solutions. A spatial mismatch between resources and demand brought the development of a regional power grid, allowing further movements within the region to share large urban centres, peak loads, and opening energy export channels to Eastern China and Malaysia; thus adding even more complexity to the overall situation, and shifting the thinking further from a national to a regional scale. The unharnessed hydropower potential of the region stands high on the options list, and is therefore earmarked in national strategies to contribute an important share of the prospective demand. Yet, examples throughout the world have shown the environmental impacts of hydropower are difficult to ascertain and are therefore at risk of being underestimated. Markets don’t like uncertainty, and local economies will have to pay a dear cost for wrong choices. While the World Commission on Dams report allowed an important step forward in the understanding of those issues, there is still a pressing need for more practical answers tailored to the specificities of the GMS context. Three organisations, -ADB, MRCS and WWF - have joined forces, to attempt to address some of these gaps. The aim of this initiative for Environmental Criteria for Hydropower Development (ECHD) is to provide interested stakeholders with information, knowledge and tools to better manage hydropower so that the ecological functions of rivers, the natural resources they provide to other economic sectors, and the livelihoods of people that depend on them are maintained acceptably and appropriately. The present technical document gathers the background information and sets the basis, for the three current partners involved to undertake a consultation process with a broader range of stakeholders. It is hoped that this is a useful start that will contribute to an improved understanding and, in the end, inform decision making for a more sustainable future for the people of the Mekong. Mr Urooj Malik Dr Olivier Cogels WWF Greater Mekong Director, CEO Representative Southeast Asia Department MRC Eric Coull ADB iii The Current Status of Environmental Criteria for Hydropower Development in the Mekong Region: A literature compilation Table of Contents EXECUTIVE SUMMARY ..........................................................................................X 1. HYDROPOWER IN THE GMS............................................................................1 1.1 Cambodia.......................................................................................................1 1.2 PRC – Yunnan Province ................................................................................4 1.3 Lao PDR.........................................................................................................5 1.4 Myanmar........................................................................................................7 1.5 Thailand .......................................................................................................10 1.6 Viet Nam.......................................................................................................12 2. THE PLANNING CONTEXT.............................................................................16 2.1 GMS and MRC Water Resources Management Context .............................16 2.1.1 GMS and MRC policies and strategies for water resources management..... 16 2.1.2 Integrated water resources management – from global commitment to country actions................................................................................................................ 19 2.1.3 Country water resources planning contexts................................................... 20 2.1.4 Possible entry points for environmental criteria in water resources planning 23 2.2 GMS and Mekong Hydropower Development Context................................24 2.2.1 Policy framework and strategy...................................................................... 24 2.2.2 GMS hydropower project inventory.............................................................. 38 MRC DIALOGUE PARTNERS (UMR).....................................................................39 TABLE 5 ILLUSTRATIVE PARAMETERS OF HYDROPOWER PROJECTS IN GMS COUNTRIES .....................................................................................................41 2.2.3 Role of environment criteria in power planning systems in the GMS ......... 45 2.3 Public Participation in Hydropower Planning............................................53 2.3.1 Preliminary Stakeholder Analysis ................................................................. 53 2.3.2 Public participation in hydropower planning in the GMS............................. 54 3. ENVIRONMENT CRITERIA FRAMEWORK..................................................58 3.1 Environmental Policies and Criteria of Multilateral Institutions................58 3.1.1 Asian Development Bank.............................................................................. 58 3.1.2 World Bank ................................................................................................... 61 3.1.3 World Commission on Dams ........................................................................ 63 3.1.4 Japan Bank for International Cooperation (JBIC)........................................ 66 3.1.5 Equator Principles Banks....................................................................................... 67 3.2 National/regional approaches to environment and natural resource management policy and criteria in the GMS ...........................................................68 3.2.1 Environmental laws and policies in the GMS........................................................ 68 iv The Current Status of Environmental Criteria for Hydropower Development in the Mekong Region: A literature compilation 3.2.2 MRC’s environmental planning tools .......................................................... 80 3.2.3 Case Study - Lao PDR – Cumulative Impact Analysis and Nam Theun 2 Contributions .................................................................................................................. 81 3.2.4 Case Study - Viet Nam – Pilot Strategic Environmental Assessment in the Hydropower Sub-sector (contributed by ICEM) ............................................................ 82 3.3 Experience in developing environmental criteria for hydropower in non- GMS countries .........................................................................................................95 3.3.1 Bhutan ........................................................................................................... 95 3.3.2 Switzerland.................................................................................................... 99 3.4.1 Certification schemes .................................................................................. 102 3.4.2 International Energy Agency (IEA) ............................................................ 104 3.4.3 Institute of Low Impact Hydropower.......................................................... 107 3.4.4 International Hydropower Association Sustainability Guidelines ............. 111 3.4.5 Power Scorecard.......................................................................................... 121 3.5 Selection of Suitable Environmental Criteria............................................121 3.5.1 Comparison of existing criteria ................................................................... 121 3.5.2 Future application of environmental criteria in hydropower development . 123 REFERENCES ..........................................................................................................127 ANNEXES.................................................................................................................134 Annex 1. Hydropower Inventory.......................................................................134