II.1 Dams, ecosystem functions and environmental restoration
Scoping Paper - Terms of Reference

1.1 Introduction

1. Large storage dams regulate the flow of water and sediments down the basin and impact the functions and services of riverine ecosystems and their biodiversity in many different ways. These have been extensively studied over the last twenty years as environmental awareness has grown, but in many cases much work still remains to be done on quantifying and costing such impacts. For the time being the science of wetland and river ecosystem management is still in its infancy and lacks full predictive capacity for the different regions of the world. What are increasingly available, however are clear descriptions and examples of the kinds of downstream impacts on ecosystem functions and biodiversity that can be anticipated from a large dam. A movement is also underway to restore, to a greater or lesser degree, the natural values of riverine ecosystems, often due to belated recognition that something of intrinsic or spiritual value had been lost during past development activities. This is sometimes ascribed to changing perceptions in the societies of developed countries that are no longer striving solely, or principally, for economic development. (examples in US, France, Switzerland, Danube basin, Rhine basin).

2. Ecosystem functions and services are those natural processes that meet human needs and are provided free of charge and are distinguished from intrinsic, cultural or aesthetic values such as biodiversity, landscape values, free-flowing rivers etc. . When these services are lost they can in some cases be replaced by technological solutions. Eg if wetlands are drained that normally help purify water by recycling or adsorbing pollutants then a water treatment plant may have to be built to undertake the same task.

3. A broad list of ecosystem functions and services is given in the table below, yet it should be borne in mind that not all ecosystems provide them to an equal extent. Within the catchment context, there may be dam-ecosystem interactions from the top of the basin, right down to the sea and this illustrates the complexity of dealing with this issue. Costanza et al estimated, controversially, that ecosystems worldwide provide free services to the value of $33 trillion per year, a non-negligible sum, and that these services are fundamental to maintaining sustainable use of renewable resources world-wide.

4. The assessment of intrinsic, cultural and aesthetic values cannot usually be addressed in the same way, as there is no replacement when these values are lost. These values are therefore usually addressed through a political or ethical process rather than a process of economic valuation.

5. In some cases dams have created water bodies that reflect some ecosystem values, especially for wildlife or for lake fisheries for example. Some reservoirs support substantial waterfowl populations and qualify as Ramsar sites. Others have had productive and valuable National Parks declared along their shores. Within the dams debate, dam proponents assert that dams can improve the environment by creating new water bodies with environmental values and that mitigation can reduce the negative environmental impacts. Environmental groups point, on the other hand, to downstream loss of habitats, functions and services and to the fact that steep sided dams with large intra-annual variations in level rarely provide good habitats for wildlife. They further assert that lake fisheries have not adequately replaced damaged riverine fisheries for those who depended on them before dam construction.

Source: Costanza, R., R. d'Arge, R. de Groot, S. Farber, M. Grasso, B. Hannon, K. Limburg, S. Naeem, R.V. O'Neill, J. Paruelo, R.G. Raskin, P. Sutton, and M. van den Belt. 1997. The value of the world's ecosystem services and natural capital. Nature 387:253-260.

6. For downstream ecosystems the impacts of dams can sometimes be partially mitigated by flood releases at particular times of year, although this is unlikely to restore or maintain full ecosystem function or the conservation of all biodiversity values. The Environmental Flow approach requires some definition of the ecosystem functions that need to be restored or maintained. The success of this approach is predicated on the ability to define, and then achieve, desired ecosystem objectives. Where these objectives are defined by societal choice on a site by site basis, this can be a lengthy process. Where societal values have led to clear legal requirements (eg an obligation to maintain populations of an endangered species, or a particular level of water quality, or a percentage of annual flow) the approach can be more scientific and technical.

7. Some countries are seeking to restore floods on rivers with long-standing dams. These policies frequently come about due to the changes in ecosystems and resource use that have occurred since the dam was constructed. Many of the fundamental issues associated with dam projects (notably the distribution of benefits) will need to be revisited during restoration, with modified value-judgements attached to each that reflect changing values since the dam was constructed. There are a range of trade-offs to be addressed as water may be diverted from power generation, irrigation or water supply in order to meet ecosystem needs.

8. Ecosystem functions and services have been extensively studied over the last twenty years as environmental awareness has grown, but only in the last 10 years has this kind of thinking become mainstream. Much work still remains to be done on quantifying and costing ecosystem services and for the time being the science of wetland and river ecosystem management is still in its infancy. The science also lacks 100% predictive capacity even in developed countries where there are substantial human resources and historical research to draw on. One of the reasons for this is the lack of research information required for adequate assessment of the baseline and for the modelling of future scenarios.

9. The science has, however, allowed a clear distinction to be made between ecosystem products that can be sold on the market (and for which prices exist, revenue is generated and jobs maintained) non-marketable services (such as water quality maintenance or groundwater recharge) that are more difficult to price in evolving circumstances, and intrinsic values. There is little clear guidance on how to price "free services", particularly in developing economies that need to generate real, not virtual incomes and where society may value these services more highly 20 years hence as the economy develops . For biodiversity and other intrinsic values, the pricing is notoriously difficult; many authors preferring to promote an ethical, rather than an economic approach to biodiversity conservation.

10 .What are increasingly available, are clear descriptions and examples of the kinds of downstream impacts on ecosystem functions that can be anticipated and ways in which some of these can be avoided. There is evidence to suggest that dam proponents and opponents broadly agree on the nature of ecosystem impacts of large dams but disagree on the value or importance to be attributed to them.

11. Another sensitive area relevant to WCD's work is the incremental effects of multiple dams within the basin. As each new dam is built and operated, downstream (and sometimes upstream) ecosystems are modified. The question – "is this a good or a bad thing ? " can only be weighed against society's wish for a set of values or services that it expects that ecosystem to provide. These can be defined as river management objectives that require particular flow regimes or water quality for their attainment. The question might then become - "does the construction and operation of the new dam still allow us to reach (pre-defined) river management objectives ?" , rather than "is the incremental cost of this additional dam acceptable ?"

12. The scope of work has evolved considerably since the first draft of this paper, agreed by Commissioners in Prague in March as different submissions have been sought and partnerships built with other organisations. A substantial contribution will be made through UNEP and the UN Foundation funds with the assistance of IUCN. A contribution on fisheries will be made by FAO, and a range of other submissions will be sought to cover other aspects of the thematic. A lead writer will be identified to compile an overview report drawing on the different contributions.

13. UNEP and WCD are assessing the benefits and impacts of large dams on the environment, including downstream areas, reservoirs, and upstream impacts on the biotic, geochemical and physical environment. UNEP, in consultation with WCD, will select and recruit consultant(s) to undertake the following tasks :

• Review availability of databases and information possessed by various international and regional organizations (WWF, IUCN, WRI, Nature Conservancy, etc.) to provide an overview of the usefulness of the existing databases and information to assess impacts of dams on aquatic ecosystems and biodiversity.

• Wherever possible, obtain existing data bases for (a) maps of major rivers, wetlands and aquatic ecosystems affected by dams (e.g. overlays of dam distribution and biodiversity hotspots) (b) an analysis of dam distribution and reservoir size by major biotype (e.g. tropical, arid, semi-arid, temperate, arctic etc., more detailed where data exist) to identify where dams have had most impact on significant global biodiversity and endangered species.

• Provide a summary of trends and statistics in environmental impacts of dams. (e.g. river miles affected vs free-flowing rivers, sediment flows, reduction in nutrient flows to the sea, reduction in freshwater inflows and degradation of water quality, etc.) and their environmental and ecosystem consequences. Document available sources and quality of data.

• Characterise the nature of the impacts of dams on ecosystem structure and functions and services illustrated with appropriate examples.

• Propose an appropriate framework of ecological indicators to establish scientifically-based goals for ecosystem health in order to evaluate and monitor environmental impacts.

• To what extent can reservoirs provide habitat for valuable biodiversity –how do operation rules, or physical or chemical characteristics of the reservoir affect this function. How does the value of reservoirs for biodiversity compare to the values of natural aquatic ecosystems ?

• To what extent can international funding mechanisms, including GEF contribute to compensating or mitigating the impacts of large dams on biodiversity ?

• What institutional or financial mechanisms might be proposed to enhance compensation/mitigation of large dam impacts on biodiversity ?

FAO shall coordinate a study involving subcontracting of global experts in order to answer the following questions :

• To what extent have river fisheries been influenced by dam construction, and have dam fisheries been able to replace riverine and estuarine/ marine fisheries impacted by the dam, and if so, to what extent?
  a) by tonnage
  b) nutritionally
  c) for affected fishermen
  d) by species composition

• Is mitigation by fish ladders effective for migratory species, particularly in the developing world?

• What is the information base and capacity required for effective management of fisheries through the project cycle (appraisal, design, construction, operation).

• What are the existing criteria and guidelines concerning dams and fisheries, and how could they be improved?

15. What is the information base necessary for informed decision-making and monitoring of ecosystem impacts?

• This section will look at past practices in environmental mitigation and compare and contrast these methods with the approach required for ecosystem-based decisions to have some predictive value, and for the results to be monitored. The information base will be categorised into essential and desirable data sets.

16. What is international best practice in defining instream flow requirements and is it feasible to develop them for large basins?

This paper will look at :

• best practice world-wide in fixing objectives, and setting and monitoring the instream flows.

• the design features of dams required to deliver adequate releases of water of acceptable quality when the dam is not spilling.

• criteria, guidelines and incentive frameworks to implement recommended practice

17. Submissions have been requested from distinguished academics or international centres of experience and expertise on the following topics :

• The nature conservation values of dam reservoirs compared to natural wetlands.
• Dams and River Geomorphology.
• Ecological Indicators for monitoring ecosystem health.
• The impact of dams on large scale processes, such as flows of freshwater or nutrients to the sea.
• Other submissions requested by 30 September

18. Eight experts drawn from academia, NGOs and the dam design and operation constituency with appropriate representation from the different spectra of the developed and developing world. The panel will communicate by e-mail.

2.3 Timeframe

Finalisation of scoping paper August 1999

Discussion with potential writers May to August 1999

Contracting of writers May to August 1999

Draft consolidated paper 31 October

Panel review of draft paper November

Receipt of final paper 30 November

19. All of the case studies will be assessing anticipated and unintended environmental impacts and their mitigation. This information can flow through into the thematic review in cases where it is available in time.

20. In the cross-check analysis data are collected on the presence or absence of tools for predicting impacts (eg hydrological models of downstream flood height and duration) and on the major environmental impacts recorded for the dam.

21. There are linkages with the following thematic reviews

• I.1Social impacts of large dams modifications to downstream natural resources that impact on people (eg lost fisheries, floodplain grazing etc)
• III.1 Economics linkages with valuation techniques
• IV.5 Operations modified operations, or decommissioning to alleviate environmental impacts; trade-offs
• V.1 Planning approaches incorporation of River management objectives in the planning process
• V.2 EA incorporation of River management objectives in the planning process
• V.3 River basin management incorporation of River management objectives in the planning process, compensation of loss of biodiversity
• V.4 Regulation and compliance effective implementation and compliance of River management objectives

22. This thematic will inform work on the global review and provide recommendations on the planning, appraisal, design and operation phases of the project cycle

• Generic, illustrated by examples, impacts on functions, biodiversity, geomorphology, water quality, reservoir impacts etc.

• Cumulative impacts within catchments

• Degree of linkage to other catchment processes (deforestation, pollution, urbanisation )

• Some assessment of the conditions under which the different kinds of impact occur

• Do the ecosystem values of reservoirs, eg for biodiversity, compensate for the loss of wetlands in the downstream ecosystem ?

• What have been the impacts on downstream livelihoods ? (brief linkage with thematic on social impacts)

• The use of indicators to measure change

• Dams and biodiversity
• Lengths of river affected by dams
• Global change – sediment and nutrient transport, f/w flows to oceans.

Assessment of importance of ecosystem components (10 pages)

• Is replacement of lost functions and services possible - at what cost ?
• What components are susceptible to economic valuation and internalization, and which are not ? (linkage to economics thematic)
• How should intrinsic/spiritual/ethical/landscape values be addressed ?

• Positions of different groups (refer to Annexes for details, eg ICOLD and environment, NGO declarations etc)
• Areas of convergence/divergence

• Impact of dams on downstream fisheries
• Role of reservoir fisheries

International trends in dams and environment policies (refer to annex) (3 pages)

• Summary of trends developed/developing countries
• How has increasing knowledge affected decision-making and policies
• Requirements of international Conventions
• Changing values lead to ecosystem restoration
• Some examples from developed and developing countries

• Summary of EFR paper
• Reference to EIA thematic
• What are the information needs for informed decision-making and for monitoring of subsequent ecosystem health ?

• Dealing with scientific uncertainty
• Need for site/basin-specific research (non transferability of models)
• Valuation and quantification of ecosystem values and biodiversity
• Trade-offs between economics, CBA and ethical considerations
• Human resources and finance in developing countries
• International nature of many river basins (Link to RBO thematic)

• Proposals on values
• Guidance on policy, criteria and guidelines

• Water policy declarations (eg Dublin)
• International conventions (Biodiversity, Ramsar, Bonn etc)
• Examples of legal frameworks to internalise ecosystem values in DM (?)

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