The pictures from Belize are so
pretty. Multi-hued birds in green trees, monkeys yammering on the
forest floor, clear water burbling down a mountain river. All of that,
according to critics of Canadian company Fortis Incorporated, will soon
be under water.

Why? Because this week Fortis received what looks like final
approval to proceed with the controversial Chalillo project. The dam
will flood something like 10 square kilometres of Belizean forest, and
that has environmentalists – in Canada and elsewhere – in an uproar.

Trying to make sense of the Chalillo dam is a struggle in itself.
The players change on a regular basis; there are at least as many
counter-reports as actual impact reports; and dark allegations of
corruption and payoffs are thick on the ground.

The project has been in the works for more than a decade, with
companies rotating in and out of the catbird seat on a fairly regular
basis. For example, Fortis obtained the rights from Duke Energy. The
latter company opted out, in part, because of pressure from various
groups, apparently deciding that fiscal discretion was the better part
of environmental valour.

This time around, however, the dam looks like a done deal. A legal
challenge to the construction of the Chalillo dam failed this week in
the Privy Council in London (the former British colony’s final court of
appeal).

In a 3-2 split decision, the Privy Council said the process followed
by Belize was acceptable. The country could go ahead with the dam, much
to the chagrin of dug-in environmentalists everywhere, such as
Elizabeth May of the Sierra Club in Canada.

There is much cynicism in the tireless environmental opposition to
the Chalillo project. For example, no one denies that citizens of tiny
Belize (population 250,000) need more electrical power to drive
economic growth, nor does anyone deny that Belizeans currently pay
among the highest electricity rates in Latin America.

So where is the power to come from? Too many environmentalists have
a knee-jerk response to such questions, and that is neatly shown in the
Chalillo project.

Such people sidestep the whole issue of sourcing electrical power,
and say instead Belize could get power at attractive rates somewhere
else. Maybe Mexico, or maybe diesel, or maybe by burning trash. Just
not this dam, apparently.

But buying power from Mexico, for example, is merely passing the
environmental buck. Does anyone truly believe electrical power
production in Mexico is, by definition, greener than hydroelectric
would be in Belize? It is cynical in the extreme to pretend that by
stopping one project in Belize you have solved an environmental problem
if all you are really doing is passing the problem on to the next power
supplier up the road. But that is the kind of cynicism that is rife in
environmental circles.

Critics do, however, have one fair point in all of this. It was
captured by the dissenting opinion in this week’s Privy Council
decision. The opposing officials said the environmental impact
assessment (EIA) for the Chalillo project, which was paid for by the
Canadian International Development Agency to the tune of a half-million
dollars, “was so flawed by important errors about the geology of the
site” as to be unacceptable.

Why flawed? Because, according to the Privy Council, the EIA said
the Chalillo site geology was different than it actually is. What was
originally said to be a granite bedrock now seems more likely to be a
predominantly sandstone bedrock. While the latter is capable of
supporting the dam, it will require changes in the dam design – and,
thanks to CIDA, creates risks that the citizens of Belize were not
informed of until late in the approval cycle.

In effect, the Belize government used the imprimatur of Canadian
money (via CIDA) to push through approvals on the Chalillo project.
After all, Canada is not a corrupt country, so any evaluation paid for
with Canadian money is likely to be a good one. But that is, of course,
flawed logic. Minions at CIDA did not write the Chalillo EIA; they
merely paid a favoured engineering contractor to do it.

But the history of international aid in support of hydroelectric
projects is not auspicious. As William Easterly ably chronicles in his
excellent book The Elusive Quest for Growth: Economists’ Adventures and Misadventures in the Tropics,
First World countries’ interventions in developing regions too often
warp economic gravity. They provide easy economic and political cover
for dubious projects that need further fleshing out.

The result, of course, is the opposite of what is needed. Such
projects become the playthings of interest groups, domestic and abroad
– the citizens of regions like Belize are merely an irritating economic
afterthought.