Paul C. Huszar

Critical environmental costs of the Paraguay-Parana waterway project in South America

Abstract The proposed Paraguay-Parana waterway project, know as “Hidrovia”, would improve and develop year-round navigation by large ships and barge trains from Caceres, Brazil, to the harbor of Nueva Palmira, Uruguay. Of particular environmental concern, the project would drastically alter the river system in the previously undeveloped reach from Caceres to Corumba, Brazil, and directly affect the Pantanal. The Pantanal is one of the worlds largest wetlands and is important both for the biodiversity it supports and for its regulatory impact on the downstream river system. This preliminary evaluation of the project establishes a critical value for the environmental costs that, if included in the evaluation of the project, would tip the scale in favor of preserving the Pantanal rather than developing the waterway through it. It is concluded that the environmental costs may exceed this critical value and that the waterway may be uneconomical in the Pantanal. The indication is that expenditures on further feasibility studies are likely best spent by investigating the feasibility of the project downstream from the Pantanal.

The Sustainability of Indonesia's Upland Conservation Projects

The Upland Agricultural and Conservation Project in Central and East Java is representative of Indonesias upland conservation efforts. An important component of the project was the use of subsidies to promote activities which increased farmer incomes and soil conservation. Two types of subsidies were used: an operating subsidy for annual inputs such as seed, fertiliser and pesticides; and a capital subsidy for terracing and related construction. This study measures the extent to which the effects of the subsidies were sustained over varying periods following termination of the project. The results show that the effects of the operating subsidies are clearly not sustainable; the effects of the capital subsidies may persist longer, but they too are probably not sustainable.

Overestimated benefits and underestimated costs: the case of the Paraguay—Paraná navigation study

A major river navigation project, the Paraguay—Parana Hidrovia, is being considered by the governments of Argentina, Bolivia, Brazil, Paraguay and Uruguay. The recently completed feasibility study for this project is seriously flawed and the errors systematically contribute to overestimating benefits and underestimating costs. The errors include overestimating the probability of a collapse in navigation, ignoring alternative forms of transportation, overestimating growth in regional shipments, omitting relevant construction costs, and perhaps most importantly, ignoring significant negative impacts to the environment. Correcting these errors, either individually or in concert, leads to the project not being economically feasible. Also provided is a method for including unspecified costs, such as those to the environment, in the analysis without further expensive and time-consuming studies.

Subsidisation of Upland Conservation in West Java: The Citanduy II Project 1

The Citanduy II Projects model farm program on steep slopes in West Java was started in 1981 with the dual goals of reducing erosion and increasing farmer incomes. Limited success in reaching both goats has been achieved. Subsidies used to implement the program, however, could have been allocated more efficiently. 1 Support for this research was provided by the US Agency for International Development, Jakarta.