Hydroelectric Plants and Municipal Development: The Case of the Hydroelectric Plants of the Pelotas-Uruguay Complex

Abstract

Hydropower plants are central projects to the Brazilian economic growth strategy, being a priority in Brazilian plans of energy offering expansion and important to meet the needs of the domestic and industrial energy supply in national scale. However, most of the adverse impacts associated with hydropower plants occur in local and regional scales, even if the Federal Government argues that these projects are conductive to the development of the region they affect. Considering that there is still no sufficient empirical evidence that hydropower plants induce such development in local and regional scales, this work seeks to verify the association between hydropower plants and development, taking into account the development performance of the municipalities affected by the plants in the cities of Itá, Barra Grande, Machadinho e Campos Novos, all located in the Pelotas and Uruguai rivers (in the frontier of the States of Santa Catarina and Rio Grande do Sul). These hydropower plants were installed from 2000 to 2010. In order to verify such association, the municipalities affected by these plants were compared to other municipalities located in the same watershed. 37 indicators regarding social, economic and environmental issues were statistically compared for the two groups of municipalities. The results evince that municipalities that host hydropower plant powerhouses show a more expressive growth of their economy, a phenomenon accompanied by increase in inequalities, child labour and sewage deposit. As a main conclusion, it was found that hydropower plants are associated with a process of municipalities’ economic growth that is not utilized to mitigate the increase of social-economic inequalities and environmental problems.