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Internalization of External Benefits Brought by Hydropower Development.
Huiyan Wang1,2, Yong Li1, Jia Li1
1State Key Laboratory of Hydraulics and Mountain River Engineering, Sichuan University, Chengdu 610065, China.
International Journal of Environmental Research and Public Health
|January 18, 2020
Summary
Hydropower projects generate significant external benefits for various stakeholders. This study models these benefits and proposes methods for internalizing them to compensate affected parties, improving benefit-sharing mechanisms.
Area of Science:
- Environmental Economics
- Energy Policy
- Water Resource Management
Background:
- Hydropower development creates substantial uncompensated external benefits.
- Identifying and quantifying these benefits is crucial for equitable resource management.
- Existing benefit-sharing mechanisms often fail to account for these externalities.
Purpose of the Study:
- To define and identify beneficiaries of hydropower external benefits.
- To develop models for measuring dynamic changes in these benefits.
- To establish a model for internalizing external benefits and compensating affected populations.
Main Methods:
- Definition and identification of external benefit recipients.
- Development of dynamic models to quantify external benefits over time.
- Establishment of an internalization model for benefit redistribution.
- Case study analysis of the Z hydropower project in China.
Main Results:
- External benefits for surrounding/downstream areas are projected to grow from $18 million (2006) to $114 million (2065), with compensation rising from $4 million to $97 million.
- External benefits for power receiving areas are projected to increase from $125 million (2015) to a maximum of $133 million (2026), with compensation reaching $133 million by 2033.
- The proposed internalization model demonstrates potential for improved benefit sharing.
Conclusions:
- External benefit sharing enhances hydropower development's benefit-sharing mechanisms.
- Effective redistribution of external benefits is achievable through internalization models.
- This approach can lead to more equitable outcomes for all stakeholders involved in hydropower projects.
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