TED Case Studies

Three Gorges Dam




     CASE NUMBER:        264
     CASE MNEMONIC:      THREEDAM
     CASE NAME:          Three Gorges Dam Project

I.  IDENTIFICATION

1.  The Issue

      China has undertaken the greatest project since the erection
of the Great Wall and the Grand Canal -- the Three Gorges Dam
project.  The Three Gorges Dam will be the largest hydropower
station and dam in the world, with a 1.2 mile stretch of concrete
and a 370 mile-long reservoir and 525 feet deep.  This project will
cost more than virtually any other single construction project in
history.

2.  Description

      The idea of building a dam across the Yangtze river to control
flooding and to and to harness it for hydropower has been the dream
of several generations of Chinese since the time of Dr. Sun Yat
Sen, forerunner of China's democratic revolution.  The first
proposition for construction dates back to the year 1919, when Dr.
Sun Yat Sen suggested to build a dam at the Three Gorges.  Since
1954, Chinese and foreign scientists and engineers have devoted
themselves to the planning, design and consulting work of the
project.

      As planned, the capacity of Three Gorges dam, 17 million
kilowatts, will top that of the largest dam currently operating by
40 percent.  Its projected annual power generation of 84 billion
kilowatt-hours is equivalent to a coal mine capacity of 40 to 50
million tons per year.   The project will supply power mainly to
the central China grid of Hubei, Hunan, Henen, and Jiangsu, and
Anhui.  It will cost (in 1990 prices) as estimated RMB 57 billion
($ 10.57 billion).  Once completed, the dam will be 185 meters high
and store 39.3 billion cubic meters of water.  It will create a
reservoir 36 miles long and 525 feet deep.  

      Supporters say the benefits of the project far outweigh the
costs.  The principal advantage of the project is to generate power
to keep pace with China's economic growth.  It is estimated that
China's power output must rise by 8 percent annually to keep pace
with 6 percent annual increase in gross national product.  In
practical term, that means the nation's total 1990 power capacity
of 130 million kilowatts must grow to 580 million by the year 2015. 

      Chinese officials note that the dam will relieve the danger of
flooding.  The Chang Jing River Valley has been chronically
threatened by flooding.  For example, in 1954, a flood killed
30.000 people and left one million homeless.  In addition,
navigation capacities on the river from Yichang to Chongging will
be improved, thus, 10.000 tons fleets can make direct trips.  

      Another advantage of the dam is to reduce emissions of sulfur
dioxide and carbon dioxide; generating electricity equal to about
40 million tons of coal.  China's growing coal consumption poses a
huge threat to the environment.  Coal burning emits several harmful
air pollution including carbon dioxide (CO2), a major contribution
to the global warming.  Three quarters of the country's energy
comes from coal.  China used between 1.1 and 1.2 bn tons of coal in
1993, mostly for heating and generating electricity.  Industry
source predict China will consume as much as 1.5 to 1.6 bn tons by
the year 2000.  Sulfur dioxide emissions, which cause acid rain,
are expected to rise from 15.5 million tons in 1991 to 1.4 billion. 

      However, social costs of resettlement and environmental damage
are enormous.  Environmental sustainability of the project in
relation to massive resettlement and ecological damage is to be
focused in this paper.  Chinese officials estimate that the
reservoir will partially or completely inundate 2 cities, 11
counties, 140 towns, 326 townships, and 1351 villages.  About 23800
hectares, more than 1.1 million people will have to be resettled,
accounting for about one third of the project's cost.  Many critics
believe resettlement would fail and create reservoir refugees.  The
forced migration would raise social unrest.  Many of the residents
to be resettled are peasants.  They would be forced to move from
fertile farmland to much less desirable areas.  

      In April 1992, the National Peopležs Congress approved the
construction of the Chang Jiang  River, the worldžs third largest
river, as part of Chinažs 10-year development program.  The project
has four goals:  to prevent flooding of the navigation on the
river, and to generate power for the surrounding communities.  It
consists of three parts:  a dam, a hydropower station and
navigation facilities.

      The impact to international trade is indirect, but
nonetheless, important.  The construction of the hydroelectric dam
requires numerous international inputs, such as machinery and
hydraulic equipment.  Moreover, the generated power of 17 million
kilowatts will be used for industry to boost outputs.  The ground
breaking began December, 1994, but the resettlement of residents
had begun two years before that.  The full-scale construction is
currently underway and the projected completion date is 15 years
away in the year 2010.

      In April 1992, the plan was formally endorsed by the National
Peopležs Congress (NPC).  It is believed that the project will
alter the entire ecological system and environment in the area. 
Not only will it divert the riveržs natural course, but it will
also reclaim hundreds of acres of land that is the habitat for many
species.


      The project will also cause devastating environmental damage,
increasing the risk of earthquakes and landslides.  It will also
threaten the riveržs wildlife.  In addition to massive fish
species, it will also affect endangered species, including the
Yangtze dolphin, the Chinese Sturgeon, the Chinese Tiger, the
Chinese Alligator, the Siberian Crane, and the Giant Panda. 
Moreover, silt trapped behind the dam will not only deprive
downstream regions, but also will impede power generation from the
back-up.  Construction of the dam would require extensive logging
in the area.  Finally, the dam and the reservoir will destroy some
of Chinažs finest scenery and an important source of tourism
revenue.

3.  Related Cases

     ATATURK case
     MEKONG case
     COLORADO case

     Keyword Clusters    
     (1): Forum                    = CHINA
     (2): Bio-geography            = TEMPerate
     (3): Environmental Problem    = HABITat Loss


4.  Draft Author:  Susan Lynne Tillou and Yuri Honda

B.  Legal Filters

5.  Discourse and Status:  Disagreement and  In Progress

6.  Forum and Scope: CHINA and UNILATeral

      The forum to which the case applies is domestic.  However, due
to international funding possibilities and other international
environmental groupsž concern over the issue, it has developed
somewhat of an international multilateral focus.  It is bilateral
in the sense that it involves the agreement of and commitment to
financial funding between China and other lending countries on an
individual basis.  Many international environmentalists have become
involved by supporting the cause of those who fight against the
project domestically.  There are no existing domestic rules to
regulate environmentally unsound dam projects.  However, standards
and compliance mechanisms enforced by international lending
institutions are -- and might continue to impose -- indirect
regulatory pressure on the Chinese government.  Therefore, the
project remains a function of domestic politics within the
Communist Party. 

      This project is controversial both inside and outside China. 
Outside China, the chief focus of opposition to the dam is the
International Three Gorge Coalition headed by Green China, a group
of Chinese students based in the United States. Other members
include the Overseas Chinese Ecological Society, Friends of the
Earth, and the Canadian group, Probe International.  There is also
opposition within China.  About one third of the 1992 National
People's Congress either voted against authorizing Three Gorges or
abstained. (Li Qin You and Gwynne Peter)  Although the political
repression that has set in after the June 1989 Tiananmen square
crackdown has silenced public criticism, the vote itself was held
in the midst of loud protests.  Also, deputies to the People's
Congress, including the former vice-minister for water conservancy,
Li Rui, and the former deputy director of state planning, Tian Fang
have protested the project.

      Several arguments have been held among the United States
environmentalists.  In December 1991, a coalition of wilderness
groups argued the Endangered Spices Act should be applied to the
US-funded project abroad including this Three Gorges Dam project. 
Also, in September 1993, seven U.S. environmental group filed a
lawsuit in the U.S. district court to block the participation of
two federal agencies (the Bureau of Reclamation and the Army Corps
of Engineers) from helping design and build the Three Gorges dam. 
They also claimed the violation of the Endangered Species Act.
      The World Bank is not likely to provide assistance for the
project because of a reluctance to provide assistance to hydro
electric projects.  The bank was severely criticized for providing
assistance for a controversial hydroelectric dam project in India. 


7.  Decision Breadth/Number of Parties affected: 1

      The Three Gorges Dam, in all of its magnanimity, does not
involve any other parties in the sense of sovereign states affected
by its construction.  While many countries and organizational
institutions are ethically or financially involved, the projectžs
construction will not affect anyone outside of Chinažs borders.

8.  Legal Standing:  LAW

      The Three Gorges Project Feasibility Study Report was
recompiled in May 1989.  A large source of tension in the Tiananmen
Square demonstrations of 1989 were the protestorsž opposition to
the construction of the dam.  The dam project became politicized by
the CCP leaders desire to continue with the plan in the face of the
demonstrations. It was formally endorsed by the National Peopležs
Congress in April 1992, and the project begun in December, 1994.

C.  Geographic Filters

9.  Geography

      a.  Asia
      b.  Northeast Asia
      c.  China

      The Three Gorges is the general name for the Qutang, Wuxia,
and Xiling gorges.  The Three Gorges area begins at Baidicheng in
Fengjie County,  Sichuan Province, and ends at Nanjinguan in
Yichang County, Hubei province, a distance of 193 kilometers.  The
Three Gorges area, well known for its precipitous terrain and
numerous scenic spots, has been listed as the best of the top 40
scenic spots in China.

10.  Sub-National Factors:  YES

      Sichuan province, which is upstream of the dam, will receive
only a fraction of the electricity generated by the dam.  In
addition, it will bear the burden of accommodating  resettled
people displaced by the project.  On the other hand, Hubei
province, which is down stream would benefit greatly from improved
flood control and increased energy.  Thus, regional conflicts will
be inevitable.

11.  Type of Habitat: Temperate

D.   Trade Filters

13.  Type of Measure:  Regulatory Ban [REGBAN]

      In relation to Three Gorges project, there has been no
specific measures implemented to deal with the trade in energy and
trade in parts and equipment for the construction.  However,
approval of the National Peopležs Congress for the construction of
the Three Gorges project can be classified as an administrative
measure.

14.  Direct vs. Indirect Impact:  INDirect

      Since no specific measures have been implemented, China is
eager to import international parts and equipment for the dam
construction.  The China Yangtze Three Gorges Project Development
Corporation, which is responsible for overseeing the entire
project, announced that some stages of construction would be opened
to bids from international companies.  The government has also
approved importing key technologies, materials, and spare parts
needed to build the twenty-six 680,000 kilowatt turbogenerators and
the 50,000 volt high tension transmission lines.  Joint ventures
for the dam itself are also possible.  These parts and equipment
are expensive and therefor, the amount of trade should be
significant.

      Technical assistance from abroad, such as the United States
and Japan, constitute international service flows.  For example,
the U.S. Department of Interioržs Bureau of Reclamation and the
Army Corps of Engineers are helping with technical assistance on
design and construction.

15.  Relation of Measure to Resource Impact

      a.  Directly Related:                NO
      b.  Indirectly Related:              YES  Equipment
      c.  Not Related to Product:          NO
      d.  Related to Process:              YES  Habitat loss

      As stated above, there have been no specific measures
implemented.  However, traded parts and equipment are directly
related to the construction as well as the process of construction
of the dam.  Also, generated power will be used by industries. 
Thus, the project is indirectly related to the production of
tradable outputs, and directly related to loss of ecological
habitat.

      A special economic region affected by the generated power will
be set up in the Three Gorges area.  The region will cover the area
of Chongqing, Poolin, Wanxuan and Qianjiang.  It is hoped that the
new region will be able to develop hi-tech industries and will
affect Chinažs trade outputs.

16.  Trade Product Identification: MANY

      In this case, the trade products will be the inputs to the dam
construction, such as power generators, machinery, construction
equipment, and technical services.  In addition, various industrial
products would be traded if the power could be used for industries
in the area.  Although Chinažs export of generated electricity to
neighbor countries is possible, the electricity would tend to be
consumed within China due to the location of the dam.

17.  Economic Data

      The dam and reservoir will destroy some of Chinažs finest
tourism brought the city $43 million and 400 million yuan.  It was
host to 437,000 foreign visitors and is aiming at a 15 percent
growth in 1994.  Most of the visitors come from Taiwan, followed by
Hong Kong, Japan, and other parts of Southeast Asia.

18.  Degree of Competitive Impact: LOW

      Many argue that the dam will bring about a scenario where
trade is more efficient.  However, the displacement of people
coupled with the possibility of silting and upstream flooding that
will result, could hinder those who expedite the trade as well as
the crops and businesses they support within the vicinity of the
dam.  The impact of potential trade restriction on dam parts,
equipment and technical assistance may result in preventing between
the benefits of economic growth attained by the generate power
through the dam construction and costs of destroying the
environment.  While the dam would create power to lead economic
growth, sustainability of the project in terms of the environment
and ecology must be brought into question.

19.  Industry Sector: UTILity

      The trade product associated with the Three Gorges Dam project
is electrical machinery.  Electrical Machinery will be brought in
to China over the next 15 years to construct and operate the site. 
The indirect impact that this project has will conceivably be
associated with every category on the Standard Industrial Code
(SIC) list.

20.  Exporter and Importer: CHINA and MANY

      Hydroelectric dams have been built in many countries like
India, Thailand, Brazil and the United States.  Dam construction in
developing countries requires massive international inputs which
are usually imported from developed countries.

E.   ENVIRONMENTAL Filters

21.  Environmental Problem Type:  Habitat loss

22.  Species Information

     Name:          MANY
     Type:          MANY
     Diversity:     ?

      The project will have a devastating ecological impact.  The
dam will alter the natural environment, and therefore, an almost
infinite number of species will be affected by the project.  The
endangered species affected by the project include the Giant Panda,
Chinese Tiger, Chinese Alligator, the Yangtze Dolphin, the Chinese
Sturgeon, and the Siberian Crane.  In addition, the project
requires extensive logging in the area.

23.  Impact and Effect:  HIGH and SCALE

      In addition to the above stated endangered species being
threatened, the dam will destroy commercial fish stocks and the
livelihood of fisherman.  It will also induce the danger of
earthquakes and landslides.  Thus, environmental structures in the
area will be directly affected by the project.

23.  Urgency and Lifetime:  HIGH and 100s of years

      The environmental impact of the dam project will be enormous
and far-reaching.  Affected species including the endangered
species could be wiped out.  For example, the Yangtze dolphin has
a population of only about 200 and the World Wildlife Fund lists it
as one of the most endangered creatures on Earth.  The construction
of the dam is in progress. Thus, the urgency of the problem is very
high and immediate measures to protect these species are required
if the dam construction continues.

24.  Substitutes:  LIKE

      A switch can be made in project direction from one monstrous
dam to a number of smaller dams to monitor for flood control and
redirect water for crops.  While they would not supply the huge
amounts of energy that the Three Gorges Dam would supply, they
would most certainly be more environmentally friendly.

      The environmental impact of the dam project will be enormous
and far-reaching.  Affected species including the endangered
species could be wiped out.  For example, the Yangtze dolphin has
a population of only about 200 and the World Wildlife Fund lists it
as  one of the most endangered creatures on Earth.
F:  OTHER Factors

25.  Culture:  YES

      Chinese culture in the sense of historical destruction does
come into play.  It was found that about 800 sites of local culture
will be submerged, including more than 300 sites of above ground
cultural relics.  Also, the Three Gorges project will submerge some
of Chinažs most famous historical scenery and tourist sites, the
subject of a multitude of paintings, poems and songs.

      The dam construction is a threat to the people who are
displaced from their land.  They will lose the roots of their
culture when resettling to different places; Chinese farmers have
a deep attachment to the land that has traditionally been theirs. 
Also, the Three Gorges project will submerge some of China's most
famous historical relics and scenery, the subject of myriad
paintings and poems.  These include Qu Yuan Temple, Yon yang
County's Temple of Zhang fei, the  Han watch tower, and the
carvings on the Moya Cliff.  It was found that about 800 sites of
cultural relics will be submerged, including more than 300 sites of
above ground cultural relics.  Thus, the project will have a
negative impact on Chinese culture.  However, Chinese officials
addressed conservation of these ancient relics and places of
historical interest.  Some of them will be removed or rebuilt, some
will have to be duplicated and the others will be put into museums.

26.  Human Rights:  YES

      Human Rights activists point out that internal opposition to
the project was suppressed after Tiananmen Square massacre.  Also,
massive resettlement might fail, in light of its scale and the poor
record of most other resettlement efforts.  Consequently, the
project would create millions of reservoir refugees.

27.  Trans-Boundary Issues:  NO

28.  Relevant Literature

Asia's Environmental Crisis, edited by Michael C. Howard, Westview
Press, Boulder, 1993.

CIA Factbook  (1994 statistics on countries)

Culture and Negotiation:  the Resolution of Water disputes, edited
by Guy Olivier Faure, Jeffrey Z. Rubin, Newbury Park, Calif., SAGE
Publications, 1993.

"China: Boffins Rack Brains Over Silt."  Shanghai Star.  March 11,
1994.  

"China: Dam Project Faces Resistance From Some Officials." 
InterPress Service. June 7, 1994.

"China's Great Wall of Water."  International Herald Tribune. July
20, 1994.

Chinažs Environmental Crisis:  An Inquiry into the Limits of
National Development, Vaclav Smil, M.E. Sharpe, New York, 1993.

"Dams: Japan, Bank Fund Narmaka Project; China Seeks $." Greenwire. 
November 3, 1992.

"Environmental Group sues U.S. over AID to China dam."   Reuters
North American Wire.  September 14, 1993.

Environment and Trade:  The Relation of International Trade and
Environmental Policy, edited by Seymour J. Rubin and Thomas R.
Graham, Totowa, N.J., 1982.

Electronic Mailing List for Three Gorges Project (supported by Dr.
Yegang Wu) electronic address: yegang.wu@sfwmd.gov

Internet site, :http://www.ic.gov/94fact/country/(China - 51.html,
Hong Kong -  108.html)

Jianguo Yao.  "Dream and Reality."  Beijing Review.  July 3, 1989. 

Lena H. Sun. "Dam Could Alter Face of China."  The Washington Post. 
December 31, 1991.

Li Qin You and Gwynne Peter.  "Yangtze Project Dammed with Faint
Praise."  Nature.  April 30, 1992.

State of the Environment in Asia and the Pacific, Bangkok:  United
Nations Economic and Social Commission for Asia and the Pacific,
1992.

"State of the Environment," Far Eastern Economic Review, v. 156
January 14, 1993, p.43.

"Three Gorges no watery grave for tourism hopes."  South China
Morning Post.  May 5, 1994.

"Three Gorges project proceeding smoothly."  Beijing Review.
November 15, 1993.

"World Bank Backs Unsound China Dam."  The New York Times. 
February 7, 1992.  

World Resources. World Resource Institute.  New York.  Oxford:
Oxford University Press. 1994.

Yangtze! Yangtze!, Dai Qing, edited (in English) by Patricia Adams
and John Thibodeau, EarthScan, 1994.



Go to Super Page 1/11/97