Economics of reservoir sedimentation and sustainable management of dams

Accepted practice has been to design and operate reservoirs to fill with sediment, generating benefits from remaining storage over a finite period of time. The consequences of sedimentation and project abandonment are left to the future. This 'future' has already arrived for many existing reservoirs and most others will eventually experience a similar fate, thereby imposing substantial costs on society. Such costs could be avoided if sedimentation was minimized and dams were allowed to live forever. The fact that the world's inventory of suitable reservoir sites is limited provides an additional reason for encouraging the sustainable management of dams. This paper provides a framework for assessing the economic feasibility of sediment management strategies that would allow the life of dams to be prolonged indefinitely. Even if reduced accumulation or removal of sediment is technically possible, its economic viability is likely to depend on physical, hydrological and financial parameters. The model presented incorporates such factors and allows a characterization of conditions under which sustainable management would be desirable. The empirical implementation of the model draws upon the substantial amount of technical information available. We analyze the sustainability of reservoirs, with a focus on the trade-off between such sustainability and the short to medium term benefits which a reservoir is expected to produce. The results show that, for a very wide range of realistic parameter values, sustainable management of reservoirs is economically more desirable than the prevailing practice of forcing a finite reservoir life through excessive sediment accumulation.