This Technical Guidance Note was primarily prepared as a contribution to the World Bank economic and sector work—mainstreaming environmental flow requirements into water resources investments and policy reforms jointly supported by the Environment Department and the Energy, Transport and Water Department. The technical note also forms a contribution to the Bank’s hydropower investments. The main objective of the note is to serve as a guidance document as opposed to a technical manual. It has been developed to assist World Bank staff and their clients to identify ways to better incorporate the benefits associated with environmental flow protection into hydropower dam projects.Most of the material in this note will be equally applicable to hydropower dams with either multiple objectives or a single objective, but the integration of environmental flow protection into projects with multiple objectives presents some special challenges. In addition, many issues covered in this note will be applicable to other types of water infrastructure projects.
Scientists, economists, ecological planners, resource managers, and government officials are becoming more aware of the values and functions that natural environments provide free of charge. Recognition of the worth of these natural systems is proving to be an important factor in many decisions about the future of our rivers and watersheds. Begin incorporating economics into your river conservation efforts by researching how people historically and currently appreciate your river. However, an in-depth, credible, river-specific economic analysis may be necessary to convince skeptical decision-makers. Economic analyses can be categorized into five different approaches: river recreation economics, project evaluation economics, natural watersheds for sustainable futures, land development economics, and water and power pricing economics. In every case, economic analysis is most credible and useful when it is: reflective of the full range of beneficial uses (public and private), undertaken by independent researchers, presented by respected and articulate individuals after peer review, picked up by the media, heard by policy-makers, endorsed and reinforced by local business interests, and presented in a context unencumbered by conflicting user groups.