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Analysis

Conservation Strategy Fund helps local conservationists use economic tools to find smart, efficient solutions to the most urgent environmental problems. Since its creation in 1998, CSF has conducted dozens of analysis projects in forests, rivers and coastal environments. Most of our work has focused in the tropics, where extraordinarily high levels of biological diversity are found. To maximize the reach and quality of our work, we involve leading experts and conservation organizations in all of our projects.

Subsidizing Socio-environmental Compensation Processes in the Brazilian Amazon: Impact Analysis of the Teles-Pires dam

CSF is conducting an economic analysis of the impacts of the Teles-Pires dam construction in the Brazilian Amazon, to help: (1) define socio-environmental compensation values more aligned with the well-being loss perception of the affected local community via an effective economic valuation method; (2) raise local awareness of dam impacts; and (3) defend the rights of people affected by the construction.

The Teles-Pires dam was constructed from 2010 to 2014 on the border of the municipality of Jacareacanga, in the state of Pará, and Paranaíta, in Mato Grosso (MT), Brazil. It is located next to the Kayabi Indigenous Land (IL), home of the Munduruku people. As socio-environmental impacts of this construction and operation have been observed, financial compensation has been defined, where the dam allocates part of its revenue to Jacareacanga. Environmental compensations have also been created, via socio-environmental programs for the mitigation and compensation of the impacts on health and environment in the area affected by the dam. Despite the existence of these programs, the State determinations of the compensation types and magnitudes have not been satisfactory according to local communities. There are nine lawsuits of the Public Ministry related to this topic, due to the program's ineffectiveness. Furthermore, another hydro-electric plant is being constructed, São Manoel, which will need better designed compensation programs.

In this context, CSF, in partnership with the Instituto Centro de Vida (ICV) – a MT based NGO - is conducting an economic analysis of the compensation programs from the perspective of the Munduruku people from the Kayabi IL. A diagnosis of their perceived impacts’ is in progress, including the valuation of the importance of the loss of some ecosystem services – such as fish and high quality fresh water provision – in relation to different configurations of compensation programs.

To do so, we will use the economic valuation method known as Choice Experiment, which is based on the assessment of multiple hypothetical scenarios and allows for a quantitative interpretation of the affected community’s perception of this infrastructure work.

CSF will then propose recommendations to equate those compensation programs with the perception of the welfare loss of the local community, and address their priorities and preferences in a better way.

This study’s broader goal is to raise local awareness about infrastructure impacts and provide an efficient methodology to support the compensation programs’ designed by the Brazilian government. Thus, it will support the affected people’s rights, and the lawsuits claiming higher compensation values and its negotiation processes, both for the Teles-Pire and São Manoel dams.

Additionally, we hope to contribute to the local and national debate on the construction of hydroelectric plants in the Brazilian Amazon region.

Photo credit: Marcos Amend.
Photo description: River in the Brazilian Amazon, a place of great beauty that could be flooded if a dam were to be built nearby.