Dam Threatens National Park

Summary

In the Vietnam province of Dong Nai, two dams, set to begin operation in 2015, are receiving much opposition. The dam calls for destroying 327 hectares of forest in the huge biodiversity area of the Cat Tien National Park. Vo Van Chanh is a deputy chairman for the provincial department of natural resources. He claims the effects on forestry, water, biodiversity and climate change, should call for regulation from national law. The Park is a possibility for being named an UNESCO World Heritage Site. If the dams are built it is perceived that there is no chance of this happening. The destruction of some very important habitat is also critical; the Bau Sau crocodile pond, a RAMSAR convention site, is a unique location that houses a large population of the Indochina Crocodile. The hydroelectric plants would destroy the habitat for the crocodiles as well as habitats for the endangered Normascus gabriellace, the endangered Orchidantha vietnamica and the newly discovered Camellia longii. The plants would also alter the hydrological nature of the river, creating possibilities for floods and draughts, as well as uprooting local ethnic groups. Additional concerns are that the initial papers on the environmental impact filed by the project investors were altered from the originals as well the project will open the doors for illegal logging in the area.

Analysis

Cost Benefit Analysis

A CBA would be the best way to determine whether this project should go ahead as planned or be scrapped. The project would mostly hold as a national perspective, as it deals with the Vietnam population, and how to manage the country’s resources for their own consumption. It also has some worldwide perspective in considering that the park is visited by people from all over the world, and the existence value of some of the endangered species would add benefits to people globally. Of course the environmental impacts of the climate change which the article just mentions but does not go into detail would also be considered a global perspective. This would be considered a physical project as it deals with the construction of new dams.

Program’s inputs and outputs

The inputs into the project would be:

The initial cost of producing the dams,

Annual maintenance and operation costs

327 Hectares of Forest

Loss of Biodiversity

Increased chance of having water issues (floods or droughts)

Loss of park visitors

Homes of some Vietnam locals

The outputs of the project would be:

Additional power generated

Increased Jobs

Measuring costs and benefits Valuing all the costs and benefits can be tricky. To come up with a number you would need to discount all future maintenance and operating costs as well as future income generated from power production so that you have a present value. The loss of biodiversity can be found using contingent valuation. Determine what the willingness to pay for the habitat protection of all affected species. The loss of park land and potentially the UNESCO status could be calculated by a combination of hedonic and travel cost valuations. Finding the value of the park as a willingness to pay in travel costs will determine the value placed on the park. Then use hedonic pricing to compare values of other parks with various sizes and determine the loss in value to the park as a result of the decreased park size. Do the same thing to determine what the increased value would be if the park was named a UNESCO world heritage site, and then calculate the probability that the site would have received the designation without the plant. To determine the cost of increased flooding and droughts; calculate the total damage caused by flooding and multiply it by the probability of flooding occurring each year. Do the same thing for droughts. Add up the total expected costs of floods and droughts each year and treat it as a perpetual cost each year. The costs associated with loss of housing would be equal to the cost of purchasing similar living arrangements for everyone forced to be uprooted. Comparison of benefits and costs When all values are figured out and put into present value, add up all the benefits and subtract all the costs; if the value is above zero go ahead with the project. If the project is below zero, scrap the project or find a more efficient one.

Fairness

The other issue is fairness and moral considerations. The problem with a large project like this that potentially affects so many people negatively, is that a few rich people are going to receive all the benefits of the project and may not have to pay out any of the damages that are passed on to the poorer people. In general, if the affected people do not receive compensation the project would not be fair, even though it might be efficient. Moral considerations come into play with relation to pollution/ climate change, which is again only briefly mentioned. Another moral consideration would be weather we have the right to potentially help extinct some plants and animals in the name of economic benefit.

Professors Comments

You are right that a CBA would be an appropriate approach, and you are also right that there are moral considerations that go beyond CBA. If this project uses world bank or funds from some donor nations, it probably has had such a study done. However, as it mentions private investors, it is possible that no such study has been done. Do you think that the government in Vietnam is concerned with the best interest of all people in its society, when negotiating with private companies that see an opportunity for profit?

9.5/10