Abstract

Brazil plans to meet the majority of its growing electricity demand with new hydropower plants located in the Amazon basin. The government’s energy policy forecasts the construction of 55 GW of installed capacity by 2028, with total investments in the range of 100 and 200 billion reais (30 to 60 billion dollars), and the creation 9,000 km2 of artificial reservoirs. However, the construction and operation of large hydropower plants may affect the environment, the local economy, and the population surrounding those projects. Considering the magnitude of the investments and the potential impacts for the Amazon basin, it is crucial to apply policy analysis techniques to support informed decisions about whether the construction of large hydropower plants in the Amazon is the best alternative to supply the additional electricity that Brazil needs, taking into account economic, social, and environmental costs and benefits. Here, I apply three different quantitative policy analysis techniques to assess three major questions related to the construction of hydropower plants in the Amazon region. First, I study the greenhouse gas emissions from hydropower reservoirs in the Amazon. Second, I explore the local socio-economic impacts of building hydropower plants. Finally, I investigate alternative electricity sources that could replace Amazon hydropower reservoirs by modeling the Brazilian electricity network under five capacity expansion scenarios.

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