Abstract
Hydropower construction is accompanied by both biodiversity loss and creation of livelihood opportunities for community members. The Nam Che 1 Hydropower Project (NCH1HP), intended to support the economic development of Laos, was subjected to an initial environmental examination that yielded a feasibility report. This feasibility report focused on financial analysis rather than detailed and comprehensive socio-economic and environmental analysis. However, the project development affected the hydrological landscape, leading to significant environmental and social impacts, and called into question the project’s actual costs and future benefits. Therefore, we conducted an ex-post economic evaluation of the NCH1HP. Specifically, we used cost-benefit analysis to evaluate the NCH1HP, considering the environmental and economic ripple effects of its long-term economic impact. In this study, we found that while the NCH1HP could be beneficial according to the financial analysis only, it may have a negative side effect when considering the environmental impact after the dam construction. However, a comprehensive long-term economic analysis that also took into account the spillover effects of the project showed that the project was beneficial. Policymakers need to be aware of the potential environmental impacts and economic spillovers when evaluating such projects and the NCH1HP should be re-evaluated taking them into account in a comprehensive manner.
Highlights
Hydropower energy plays a vital role in the daily activities of humans and its development has positive socio-economic and environmental impacts [1]
Hydropower development is reflected in both economies and diseconomies, with the latter resulting from environmental impacts
The project payment for energy sales was assumed in USD and as fixed in the successive years, with an electricity generation rate of USD 6.50 cents per kWh
Summary
Publisher’s Note: MDPI stays neutral with regard to jurisdictional claims in published maps and institutional affiliations. Hydroelectricity is an essential source of domestic electricity generation in many countries. Hydropower energy plays a vital role in the daily activities of humans and its development has positive socio-economic and environmental impacts [1]. It is considered a sustainable source of energy [2]. Hydropower development is reflected in both economies and diseconomies, with the latter resulting from environmental impacts
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