HKU Jockey Club Enterprise Sustainability Global Research Institute
World-Class Hub for Sustainability
Xinming Du | Shan Zhang
Requiem for Rivers? Unraveling the Global Environmental and Economic Ripples of Dams
Sep 10, 2025
Key Takeaways
- Research Question: How do large dams impact downstream environments? And how do agricultural and aquaculture sectors adapt to the environmental changes?
- Data: The study analyzes 35,140 dams globally from 2000 to 2022, integrating satellite environmental data on land use, surface temperature, yield, and ground-based observation records on plant biodiversity, as well as international trade data on crop and aquaculture exports.
- Method: Causal effects are identified using a staggered two-way fixed-effects model exploiting temporal and spatial variation in dam construction and downstream exposure.
- Findings:
- Downstream temperatures rise by 0.17% on average, with temperature volatility increasing by 1.5%; unique plant species decline by 35.8%, total plant counts drop 25%, and farmland shrinks by 2.2%.
- Crop exports fall 11%, but farmers shift to vegetables, increasing vegetable exports by 2.3%, which offsets about 30% of crop losses.
- The Enhanced Vegetation Index on remaining farmland grows 7.7%, showing more efficient land use.
- Fish exports decline 18.9%, with no increase in shrimp exports, indicating limited adaptation.
- Implications: The environmental costs of dams on downstream areas are negative considering land-use changes and temperature stability. However, farmers’ behavioral adaptation offsets the negative effects, highlighting the importance of incorporating behavioral adaptation into policy to balance energy development with environmental and economic resilience.
Source Publication: Du, X., & Zhang, S. (2025). Requiem for Rivers? Global Dams, Environmental Impacts, and Agricultural Adaptation. SSRN Working Paper
Background and Motivation
Dams are central to global renewable energy, providing over half of renewable electricity worldwide. However, their construction disrupts river ecosystems and impacts the communities that rely on downstream water flows. Although the local effects of dams are documented, few studies offer quantitative evidence on global downstream environmental impacts and how affected sectors respond economically.
This research seeks to fill that gap by investigating how dams affect downstream temperature, biodiversity, and land use, and how agriculture and aquaculture adapt to these changes on a global scale.
Data and Methodology
The authors obtained a global dataset of 35,140 dams from the Global Dam Tracker, linking dam locations and operation dates with satellite data on land use, surface temperature, and vegetation productivity. Plant biodiversity data from the Botanical Information and Ecology Network and trade data from UN ComTrade and national customs sources provide detailed information on economic outputs for affected regions at the level of specific products.
The study employs a staggered two-way fixed-effects design, exploiting differences in the timing of dam construction and the spatial proximity of areas located within 100 km downstream of the dam. This approach controls for dam-specific characteristics and global time trends, isolating the causal impact of dams on downstream environmental and economic outcomes.
Findings
Dam operations cause significant environmental changes downstream. Surface temperatures increase by about 0.013 Kelvin (0.17%), accompanied by a 1.5% rise in temperature variability. Plant biodiversity suffers notably, with unique species declining by 35.8% and total plant counts decreasing by 25%. These negative effects persist for at least 10 years after dam construction. Farmland area shrinks by 2.2%, primarily due to reduced irrigation reliability and increased soil salinity linked to altered sediment flow.
These environmental shifts have economic consequences for local agriculture. Crop exports decline by 11%, reflecting the loss of cropland and productivity challenges. However, farmers respond by shifting cultivation toward vegetables, which are more resilient to temperature fluctuations and require less land. This adaptation leads to a 2.3% increase in vegetable exports, offsetting about 30% of losses from traditional crops. Meanwhile, the Enhanced Vegetation Index (EVI) on remaining farmland increases by 7.7%, indicating improved yield efficiency, particularly in nutrient-rich soils.
By contrast, the aquaculture sector shows limited adaptive response. Fish exports decrease by 18.9%, and shrimp exports experience no corresponding increase. This lack of adaptation is attributed to environmental constraints such as water-level reductions and structural rigidities including high fixed costs and regulatory barriers, which limit shifts within aquaculture production systems.
Implications
This study challenges simplistic assessments of hydropower as an unalloyed good by revealing its uneven environmental and economic footprints. Downstream communities bear significant ecological and economic costs that are compounded by unequal adaptive capacity across sectors.
The findings highlight the need for policymakers to move beyond static impact models and incorporate behavioral adaptation and sector-specific vulnerabilities into environmental assessments. Integrating these dimensions is critical to achieving sustainable and equitable infrastructure projects.