When the River Runs Dry: The Political Economy of Hydropower Retrenchment

• In Event: International Political Economy of Technological Change

Abstract

Hydroelectric power is the predominant source of low-carbon energy in the world and a key element of global efforts to mitigate climate change. Ironically, climate change itself presents major threats to hydro production through effects such as drought, flooding, and geohazards. How do governments in hydropower-dependent countries respond to these threats, and why do some of them choose to replace hydroelectric power with other forms of renewable energy sources? In this paper, we establish a conceptual framework for the politics of climate change adaptation as it pertains to the hydropower sector and provide empirical support for the mechanisms underpinning choice of replacement technology. Climate change impacts the volatility and viability of hydropower production, which we term hydropower stress, leading to energy shortages in the short run and stock replacement challenges in the long run. We hypothesize that the distributional consequences of hydropower stress, shaped by pre-existing pricing mechanisms, shapes its effect on the trajectory of power sector buildouts. We leverage cross national data on precipitation and the location of hydropower generation to construct a measure of hydropower stress, and draw upon pricing data from the International Monetary Fund to construct our measure of price distribution between firms and households. The analysis shows that when firms bear a higher cost burden from hydropower stress, states plan for more renewable energy relative to other replacement options. This analysis is complemented by over 45 interviews with technical and political insiders from Brazil, Colombia, Laos and Nepal. Our evidence highlights the crucial role of climate-induced hydropower crises as a contingent factor in energy transitions.

Authors

• Anthony Calacino, University of Oxford

• Johnathan James Guy, University of California, Berkeley

• Aaditee Hemant Kudrimoti

• Ishana Ratan, University of California, Berkeley