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The World Bank *is* back supporting dams: http://www.aguanomics.com/2012/04/that-dam-zombie-is-back.html
I recall hearing a discussion about the fact that dams actually do contribute to green house gases because of the accumulation of decaying vegetable matter and algae growth. Does anyone have a reference for this argument?
That is a very complicated question. It would depend upon the details of the situation. The algae growth removes CO2 from the atmosphere which can then settle into anaerobic sediments and be partially fermented to methane with a lot of the carbon remaining in the lake bottom sediment where it will be sequestered. This time scale for sequestration can be much longer than some trees and other temporary sinks for carbon (all is temporary on a geological time scale), before the dam goes away and the carbon is oxidized by bacteria back into CO2. The methane in an aerobic lake can then be oxidized by bacteria into CO2 and more bacteria which can then add, along with the algae, to the organic carbon.
Deep underwater emissions of methane never reach the surface as the bacteria will eat the stuff when both methane and oxygen are in the same water.
For the most part dams are a net sink for CO2 and nutrients. The activist don't like this reality so they either don't really understand the details or don't care about the truth. The one factor they can claim is that the production of cement itself releases a lot of CO2, but as demonstrated decades ago by that totally closed habitat in Arizona, where they tried to create a totally closed ecology including humans, CO2 does disappear back into concrete. In effect the organic carbon in the soils became CO2, using oxygen, and the CO2 reacted with the concrete decreasing the O2 in the atmosphere for the humans.
I think the benefits of hydro and dams is totally understated. I know it the West, the environmental activists have dominated the discourse, but that doesn't mean they are correct. It is like the Three Gorges Dam in China, there was an article in a scientific journal about the downstream fisheries impacts of the dam, where the numbers presented were off by over a factor of 10 or more and none of the editors detected the error, when it was telling them what they wanted to hear. When I pointed out that the implied productivity numbers would have a wild river at biological loadings per unit volume in the range of a super intensive trout raceway, they did publish a little "retraction" note claiming a conversion error. But the fact that the editors were fisheries biologists who also knew all these number off the top of their heads says something.
As a young kid watching the News Reel at the Movies (late 40's), I remember clips from airplanes flying over SE China with 100's of millions flooded out and hundreds of thousands dead. Just a few year ago a huge storm system created massive mortality in Pakistan and some in India and only a little in China upstream of Three Gorges. The flow didn't come rushing through the Gorges and flood the coastal planes below.
A few decades ago with an El Nino, the Colorado river was so high, they shut down all power boats to prevent waves that could top the sides and ran the river at this absolute maximum flow rate for months to get control and they have dam after dam down that river. They had almost hit the maximum of the storage/flood prevention capacity.
With the number of people killed by the river being greater than the number of people being displaced by creating a dam, it seems like an economic, and ethical no brainer.