eugene simonov, doc, rivers without boundaries ... · kazakhstan) •slow negotiations of water...

Brisbane, Australia | 20-24 October 2019

Transboundary River Management In The Era Of The Belt And Road Initiative ( and the Fate of Hydropower)

Eugene Simonov, DoC, Rivers without Boundaries International Coalition and Daursky Biosphere Reserve


Threats to freshwater ecosystems

• Freshwater biodiversity declines much faster than terrestrial and marine species (Living planet report 2018).

• Between 1970 and 2012, the index of the average population size of wild terrestrial vertebrate species declined by 38 percent and that of freshwater vertebrates declined by 81 %.

• 87 per cent of wetlands have been lost globally in the last 300 years. (IPBES Land Degradation Report 2018)

• China undergoes the most acute aquatic ecosystem degradation

Causes of freshwater biodiversity decline include:

• habitat degradation due to water withdrawal and changes in natural flow regimes due to water infrastructure,

• disruption of biological connectivity due to dams and other man-made barriers

• water pollution

• overexploitation of natural populations

• introduction of exotic species

• conversion of natural habitat by construction and agriculture, etc


Crisis in China’s River Ecosystems

• A study of the Yellow River in China has shown that from 1960 to 2010, as many as 32 large and a thousand small dams fragmented the river basin, and the number of native fish species decreased from 163 to 80, while creation of reservoirs facilitated the introduction of 25 exotic species (Xie JY, Tang WJ, Yang YH. Fish assemblage changes over half a century in the Yellow River, China. Ecol Evol. 2018;00:1–10. https://doi.org/10.1002/ece3.3890)

• In Yangtze River Chinese shovelnose sturgeon has gone extinct, followed by Yangtze dolphin Baiji, with dozens of other species to follow the suit in next decades

https://doi.org/10.1002/ece3.3890


Good News? : China's Ecological Civilization 1.0

An integrated reform plan for "promoting ecological progress", consists of 56 articles and 30 objectives, was released by the Communist Party of China (CPC) Central Committee and the State Council in 2015

Intention: "By 2020 "Ecological Civilization" will bring into effect all policies, strategies and plans for greening the economy and achieving sustainable development." The Policy may help to advance all UN SDGs.

"Combining China’s own independent efforts with international cooperation. Take an active part in global environmental governance, and assume and perform its international responsibilities as a large developing country".


Good News for River Basins:• Ecological "red lines" drawn to protect rivers and wetlands from encroachment.

• Chairman Xi advocated environmental protection as key development objective for Yangtze and Heilongjiang Rivers and this was reflected in special chapters of the XIII five-year plan.

• Water protection from pollution and water scarcity more seriously considered by government and investors.

• "River Chiefs" assigned to every waterbody as officials personally responsible for ecological health.

• At least 1000 small dams removed in 15 provinces in 2017-2018 to improve environmental health of rivers, other dams’ operators obliged to deliver environmental flows.

• Nevertheless hydropower is listed in China’s “Green Industry Catalogue” in 2019and megadams are planned at “Three Parallel Rivers” World Heritage site, etc.

•


China is removing small dams


CHINA shares 17 large transboundarybasins and EcoCivilization Policy covers them


• Increased information exchange

• Joint assessments and planning

• "Red lines" protecting shared waters in Chinese portion of basins

• Active cooperation on restocking fish populations

• Transboundary EIAs (not granted yet)

• Decrease in pollution loads (varies basin to basin)

• Basin-wide agreements with environmental objectives (varies basin to basin)

• Equitable sharing of water resources (sort of promised but problematic)

• HOWEVER BETTER ENVIRONMENTAL CONTROLS INSIDE CHINA ALSO RESULT IN “EXPORT" OF OLD INDUSTRIAL CAPACITY AND GREATER ENVIRONMENTAL DAMAGE FROM INVESTMENT PROJECTS ABROAD.

LIKELY SHIFT IN TRANSBOUNDARY RIVER POLICIES


Export of "dirty" technology

In future China’s “ecological development” path will serve as important lesson to all neighboring nations, but at the same time in a short term stricter environmental policies within China lead to massive flux of "dirty" and resource-intensive technologies to adjacent countries.

Chinese gold-mining vessels in Kudecha , Zabaikalsky Province (photo by D.Plyukhin).


Examples of transboundary basins

Amur-Heilong River Basin (Russia-Mongolia-China):

• Increased push for information exchange and joint forecast;

• Joint Report on Flood Risk Management (2015)

• Transfer of industrial capacity/polluting industries to neighbors (oil, coal, pulp);

• Dam built on Russian river without EIA and local community consent;

• Deforestation in Russian portion of the basin, increased forest cover in China’s portion.

Mekong-Lancang River Basin

• in 2016 China launched basin-wide Lancang-Mekong Cooperation Mechanism as an alternative to the Mekong River Commission.

• China widely publicized an effort to alleviate drought in downstream countries without much coordination.

• Chinese firms/banks participate in most hydropower projects posing great threat to ecosystem.

• Attempts to develop a very damaging navigation route along Mekong.

Ili River Basin (China-Kazakhstan)

• Slow negotiations of water sharing;

• Headwaters in China protected as “key ecological function areas”;

• Water transfer planning on Chinese territory for industry and agriculture;

• Growing “transfer of industrial capacity” into Kazakh territory;

• Potential participation of Chinese foundations in Lower Ili Ecosystem restoration efforts;


Belt and Road Initiative

Stra

tegi

cp

illar

sO

bje

ctiv

e

“Facilitate tradeand promote connectivity and regional cooperation”

90 countries in scope + the Arctic region

Policy coordination

Infrastructure connectivity

Unimpededtrade

Financial integration

People-to-people

exchange

Although the BRI

policies say little

about water

management,

China’s new

strategy will

inevitably influence

river management

in many “BRI

countries” even

those not sharing

rivers with China

~$1000 billionof Investments and

contracts1 realized so far


Global Energy Interconnection (GEI) – Claim forGlobal Dominance in Renewable Energy

The GEI scheme advances interests of China State Grid Co.

One of the key GEI elements are “hydropower energy bases”


Example: Northeast Asia Energy Supergrid

• Supergrid enabled by Chinese technology carries electricity from Russia and Mongolia to Korea and Japan.

• Lena and Amur rivers designated as energy bases to develop new hydropower


Hydropower and Mining Scheme for Africa

Source: “Developing Africa Energy Interconnection to Promote Hydropower Resource Development and Achieve the Co-development of Electricity, Mining, Metallurgy, Manufacturing and Trade” GEIDCO May 2019

Energy base: Grand Inga Hydro planned on Congo River


GEI issues requiring Strategic Assessment:

• Huge negative impact from facilities on biota of remote wilderness areas and on the last free-flowing rivers (Congo, Amur, Lena, Amazon, Amy-Darya, etc.)*

• Large scale industrial development of giant facilities (as opposed to distributed generation)**

• High-voltage direct current transmission lines make destructive megaprojects in remote wilderness profitable (e.g. Belo-Monte Hydro in Brazil )

• Great dependence of clients on providers (e.g. issue of national security).

• GEI scheme is successfully marketed to governments, corporations, UN-bodies as an a sure pass into "low-carbon future" without any EIA\SEA or peer review.

• The long-distance transmission scheme underperforming in China so far and may result in a huge debt burden for recipient regions\countries.


Global Hydro with Chinese Characteristics

• 70% of global hydropower was built by Chinese companies in 2018

• China provided 75% of global investment in new hydropower in 2017

• The Three Gorges Co., Gezhouba Co., Power China\Sinohydro, Huaneng-Hydrolancang Co. and other companies actively “export excess capacity”.

• Belt and Road policies both encourage and discourage hydropower development


Up: Argentino Lake in Los Glaciares NP (Argentina) Threatened by Dam Cascade (by Turbo Contenidos)

Right: Selous Game Reserve (World Heritage Site) Open for Rufiji Dam Development by Tanzania Government.(by Greg Armfield)

Heritage Dammed!!!?Protected areas are often threatened by new hydropower projects supported by China

Left: World Heritage site Tropical Rainforest Heritage of Sumatra (by Maxime Aliaga)

See "Heritage Dammed" Final Report 2019

http://www.transrivers.org/2019/2661/

http://www.transrivers.org/pdf/20190430%20Heritage%20Dammmed%20Report%20Draft.pdf


• Tanzania’s National Environmental Management Council approved the project

• A very sensitive project with strong impact on the corporate image

- EIA contains hardly any quantitative predictions of impacts;

- Hydropower Reservoir destroys critical habitat of most endangered species;

- The project will also impact Ramsar wetlands.

Example from Tanzania

Tanzania Rufiji hydroelectric project at Stiegler’s Gorge in Selous Game Reserve UNESCO World Heritage site - the largest wild area in Africa.

China Three Gorges co. refused to take part in bidding for construction contract and made public announcement about that at World Hydropower Congress in may 2019

Sinohydro co. (subsidiary of Power China) secretly worked on the project at least since early 2019 and officially announced signing EPC contract with Egyptian contractors of Tanzanian government in August 2019. Such contract requires state approval.

In 2020 when China hosts the World Heritage Committee Session this likely be the major topic for discussion, since both Tanzania and China violated the Convention.


Egiin Gol Hydro Example. Mongolia • In 2015 China Exim-Bank signed a 1bn USD concession loan with Mongolia , largely

to support construction of a 310 MW Egiin Gol Hydro in Selenge River - Baikal Lake Basin.

• In 2016 after obtaining information on potential transboundary damage to the Lake Baikal World Heritage Site the China Exim Bank has frozen the loan. Gezhouba Co. stopped its bulldozers.

• In 2018 the loan was redirected to 12 other more sustainable development projects in Mongolia.

Pristine Egiin Gol River at the Dam

Planning Site

Machinery of Gezhouba

Co. at Egiin Gol. 2015Selenge River Delta Ramsar Site at Lake Baikal (NASA)


Why China Bank did not fund Eg River Hydro?

• Very risky projects potentially harming major rivers, World Heritage sites and other amenities. Clear message on lack of assessment from World Heritage Committee.

• Desire not to be caught in Russian-Mongolian argument over environmental safeguards for Lake Baikal Basin.

• Low economic attractiveness of relatively small dams in remote locations. Mixed experience with small hydro construction in Western Mongolia. Risk of stranded assets and non-performing loan.

• Significant local opposition both in Russia and Mongolia supported by NGOs and scientists. Clear messages sent from public meetings in the area to Chinese stakeholders

• Ability to invest the same loan money in 5 more sustainable projects (roads, education, power lines)


Green Investments: Example from Mongolia

During his official visit to Mongolia in August 2018 , Foreign Minister of China Wang Yi attended an opening ceremony of a new Wastewater Treatment Plant of Ulaanbaatar City, to be implemented with the soft loan worth USD 300 million of the China Exim Bank reallocated from the 2015 USD 1bn loan.

Where has been the China Exim bank loan redirected?


China Government Limits Investment

• In December 2017, National Development and Reform Committee (NDRC) released the Administrative Measures for Overseas Investments by Enterprises. NDRC approval is required for overseas investments made by Chinese investors directly or through offshore enterprises under their control in sensitive countries/regions or sensitive sectors.

• On 11 February 2018, China’s National Development and Reform Commission (“NDRC”) published on its official website the List of Sensitive Sectors for Overseas Investment, which includes among other industrial sectors " cross-border water resources development and utilization".

• From now on special procedure is required to review planned investment projects which may affect transboundary water resources in any country.

• We do not have evidence how this influences investment decisions


Strategic Planning and SEA tools in BRI?

• Reality: We confront haphazard development, many old risky projects\schemes grandfathered by BRI, new schemes poorly planned and competing with each other, no official SEA completed.

• “Green BRI Guidance” (2017) proclaims: “…strengthen integration of eco-environment protection strategies and plans of countries or regions along the route

• Shape a sound layout for the cooperation of production capacity and equipment manufacturing in line with ecological carrying capacity.

• Baseline ecological assessments: to understand the eco situation and relevant requirements for environmental protection in project host countries and regions, identify environment sensitive and vulnerable areas,

• “BRI Cooperation Plan”(2017) : Pilot#7 Study on Green Interconnection

Pilot#9 Environmental Impact Assessment and Strategic Environmental Assessment in Key Areas

• Not all BRI countries ratified Espoo Convention and Kyiv Protocol on Strategic Environmental Assessment, which is a key SEA tool in international sphere


Examples of “Green BRI” Efforts

1.Sino-Russian Strategy on Transboundary Network of Protected Areas in Amur River Basin 2011-2018 (中俄黑龙江流域跨界自然保护区网络建设战略 ) can become a model for transboundary biodiversity corridors under Belt and Road Initiative

China

Russia

Mongolia


RWB Coalition and WWF addressed

investors HK Exchange, Three Gorges Co.,

En+Group and warned them about risks of

investments in hydropower projects.

Since 2012 assessments results serve well in

development discussions.

Example 2.Basin-wide Strategic Environmental Assessment of Cumulative impacts of proposed and existing hydropower in Amur River Basin

中国


“一带一路”胡杨林生态修复计划

Example 3. “NATURE BASED APPROACH TO CLIMATE”: ECOLOGICAL

RESTORATION PLAN OF POPULUS RIPARIAN FOREST ALONG THE BELT

AND ROAD

Implementation by China Green Foundation with Support of State Forest and Grassland Administration of China


LIKELY SHIFT IN TRANSBOUNDARY RIVER MANAGEMENT POLICIES DUE TO BRI

• Previously China reserved water on its own territory and was not risking to share with neighbors comprehensive joint river basin-protection and management plans and mechanisms. Now as China invests in development of adjacent countries its policies likely to change to ensure that sufficient water resources are available for those development efforts. But domestic needs will still remain the ultimate priority.

• With decline in hydropower, Chinese companies rapidly develop projects all over the world and are likely to hold 70-90% of hydropower contracts globally in next decade. Companies prefer to develop basin-wide cascades and Chinese consultancies help pave for that ( e.g. Irrawaddy, Nam Ou, Ganges tribs in Nepal, Amur, Congo , Lena, Tapajos, etc.). This push presents the major threat to global freshwater biodiversity.

• Little conventional environmental safeguards apply in operations of Chinese hydropower sector, especially when acting overseas. Nevertheless awareness of risks is being raised among companies and banks and they are vulnerable to public criticism.

• Transboundary risks are high on the BRI agenda with special process and criteria allegedly designed to avoid supporting projects which may spur transboundary tensions.

• “Green BRI” policies so far are almost immaterial, but some well-meaning examples of cooperation still exist.


BRI and “anti-BRIs”Emergence of alternative cooperation proposals

Since 2018 the "US -China trade war" is unfolding with competing "connectivity initiatives" being proposed by different parties: EU, Japan, US, Australia, India.• Haphazard uncoordinated investment from many different parties, driven by political

competition, may add destruction to already worrying prospects of the BRI.• In water infrastructure and energy sector this leads to “race to the bottom” when

non-Chinese and Chinese institutions compete to develop new river basins.• In a parallel trend western engineering companies (GE, SMEC, Engie, Salini Impregilo,

etc.) adapt to support and enable projects with low environmental standards and detrimental consequences (Gibe III in Ethiopia, Rogun Hydro in Tajikistan, etc.).

• The war silences voice of reason, any criticism is an assault on national interest.• CSO community has to address all competing parties with requirements for the same

just and inclusive investment\development standards and explicitly urge them to compete for higher standards.


Shared environmental priorities;

Sound environmental flow norms agreed and observed;

Coordinated IWRM plans that undergo SEA and joint basin-management organization;

Joint ecosystem-base climate adaptation planning for preservation of ecosystem services;

Use and transfer of best available technology;

Public participation procedures and (transboundary ) EIA for all major projects.

Is sound management of transboundary rivers possible in the BRI framework?

Yes, but under certain conditions:


Thank you for your attention!!!

eugene simonov, doc, rivers without boundaries ... · kazakhstan) •slow negotiations of water...

Documents