Posted on 30 October 2023
BANGKOK, THAILAND - Multi-billion-dollar industries and vital supply chains in the Mekong region, reliant on a healthy and connected Mekong river, are increasingly vulnerable to the negative impacts of hydropower development, a new WWF report highlights.
Risk or Reward: Hydropower Impacts on Supply Chains in the Mekong Basin unpacks how continued hydropower development jeopardizes five crucial regional supply chains: energy production, fisheries and aquaculture, rice production, sand mining, and textiles and electronics. Governments, investors, and businesses are urged to question the decision to pursue further high-impact hydropower development in the region, considering the substantial risks involved.
The report’s findings — which focus on the Lower Mekong region — provide policymakers, businesses, and investors with a new perspective to understand and explore supply chain risk beyond current framings, which often neglect the systemic, complex, and long-term nature of hydropower-related risks. Through a broader analysis of what’s at stake, the report calls for decision makers to anticipate, prepare for and mitigate these risks as they continue to arise in the coming decades.
“The Mekong’s health is inextricably linked to multiple domestic and global supply chains, countless livelihoods, and the food security of more than 50 million people. With continued hydropower development in the region causing some of the most severe threats to the resilience of societies and economies — and the very existence of the Mekong delta — we must pivot towards a more sustainable and balanced approach”, said Lan Mercado, WWF Asia-Pacific Regional Director.
The Mekong's recent economic growth, while impressive, has not come without significant environmental and social repercussions. River infrastructure development has disrupted the Mekong’s natural processes, negatively impacting economic productivity and biodiversity. The report highlights that the fisheries and aquaculture industry, which is among the hardest hit sectors, is estimated to face financial losses of up to US$21 billion with a potential decline in Mekong fisheries of 30-40 per cent. Cambodia’s Tonle Sap Lake alone is facing 40-57% production losses by 2030.
“It’s time for policymakers and businesses to adopt a comprehensive understanding of the risks posed to major supply chains to inform decision-making approaches that prioritize the long-term health of ecosystems, the well-being of communities, and the sustainability of critical global industries. This report builds on decades of complementary work, offering a new holistic understanding of these risks and associated disasters that we cannot continue to overlook”, said Marc Goichot, WWF Asia-Pacific Freshwater Lead.
The report is launched ahead of the World Hydropower Congress (31 October - 2 November 2023), where more than 1,000 decision makers, innovators and experts from industry, governments, finance, civil society and academia are expected to gather for high-level policy dialogue to “influence the global growth of hydropower.”
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Download the report in full here
Photos available for third party use here.
For media inquiries contact:
Heron Holloway, Head of Communications & Advocacy, WWF Asia-Pacific, email@example.com.
Notes to the Editor:
- Examples of country-specific supply chain risks include:
- Cambodia: highest risks for fisheries, aquaculture, and textiles. Potential loss of US$3-5 billion in annual GDP due to fish production losses. High vulnerability of agriculture and energy sectors to hydropower.
- Laos: energy sector faces high risks due to reliance on hydroelectricity. Facing dry-season power shortages and escalating domestic debts. Capture fisheries and aquaculture highly vulnerable.
- Thailand: investments in hydropower and overseas projects impact regional industries with potential reputational risks. The country faces vulnerabilities in its rice production sector.
- Viet Nam: high risks for agriculture, textiles, electronics, and energy sectors, with significant financial losses projected for fisheries and aquaculture. There is also vulnerability of the power sector to hydropower-related risks.
- Recommendations for responsible action for policymakers, private sector and researchers include:
- Consider trade-offs and assess alternative renewable technologies.
- Evaluate the true costs, including social and environmental externalities, of hydropower.
- Shift towards alternative renewable technologies for sustainability and corporate social responsibility.
- Conduct risk assessments for hydropower-related threats and engage in responsible business practices.
- Promote collective action on water issues and encourage private sector engagement.
- Enforce stricter environmental regulations and increase awareness of hydropower-related risks.
- Conduct further studies on hydropower-related risks in specific business supply chains.
- Manage the hydropower sector with a full understanding of its impacts on natural and economic systems.