Damming Up Multilaterals

By Sophia Robison (Posted: February 19, 2014)

In January, Congress passed the massive House Omnibus Act and sent it to President Obama, awaiting his signature to be enacted. The omnibus outlines the United States budget for the coming year, which totals to over one trillion dollars. The act has some very interesting and far reaching elements, but, most surprising among them, is the large amount of environmental legislation throughout the document.

There’s the obvious changes in department funding. It cuts 1.7% of the Environmental Protection Agency’s (EPA) budget, while it boosts the Department of Energy’s (DOE) budget by 4.8%. The Department of the Interior (DOI) will be getting a slight increase in its overall budget, with most of the new money going to the Bureau of Land Management (BLM) and the National Park Service (NPS), transfering funds away from the Fish and Wildlife Service (FWS). The National Oceanic and Atmospheric Association (NOAA) also had some cuts, leaving them at levels lower than both the White House and the Senate had asked for .

The budget also included a number of interesting riders, the effects of which will easily be seen and felt at home and abroad. Some of these riders include the stay of execution for incandescent bulbs and the weakened limits on investments in overseas coal projects, but the most interesting provision among them provides an interesting blend of human rights, environmentalism, and foreign aid: the change in U.S. policy on large, hydroelectric dams.

“Under the new provisions, the United States will be required to vote against multilateral funding for large-scale hydroelectric projects in developing countries, as well as push for redress of rights violations resulting from development initiatives by international financial institutions,” said Carey Biron of the IPS. “In addition, Washington will be barred from offering any bilateral assistance that could facilitate certain rights abuses, extractive industries or industrial logging in primary tropical forests.”

So what does this means for the future development of large dams around the world? “Any large hydroelectric project would be subjected to serious scrutiny. History is replete with large dams financed with public funds resulting in cost overruns, environmental problems, forced displacement, and electricity that doesn’t benefit the local people who need it most,” said Tim Rieser, foreign policy aid to Sen. Patrick Leahy, the senator who requested the inclusion of the provision .

In both The World Bank (WB) and the International Monetary Fund (IMF), the United States holds upwards of 15% of all voting power; they also have a strong vote in the North American Development Bank (NADB) and the Inter-American Development Bank (IDB). In the United States, alone, there are 9,265 registered large dams, making up approximately one-quarter of all large dams in the world. With all of this influence, past investment and plans for future installations around the world, the impacts will surely be widespread, but the US government has yet to respond to the new provision. “There isn’t a lot to be said at this point,” wrote Margaret Young, State Department spokeswoman, in an email to Circle of Blue.

However, International Rivers’ Policy Director Peter Bosshard seems to think there is. “At a time when better solutions are readily available, the Congressional decision supports a shift of public funding from large, often destructive hydropower projects to decentralized renewable energy solutions which are more effective at reducing energy poverty and protecting the environment, said Bosshard. Will the new provision initiate any lasting changes amongst the human rights, environmental and foreign aid communities or will it simply dam up multilateral hydroelectric initiatives? It appears that only time will tell.