INSIGHTS RECENT HYDROPOWER PLANTS IN BRAZIL LEAD TO VARYING LOCAL ECONOMIC EFFECTS

The study finds that while hydropower plant construction typically provides a short-term boost to formal employment and municipal revenue, these effects generally dissipate within five to six years and rarely lead to structural economic transformation. However, significant variation exists between municipalities, with some experiencing sustained growth and others seeing declines, suggesting that the economic benefits of dam construction are not uniform and require case-by-case analysis.

• The economic impacts of hydropower plant (HPP) construction on local areas are generally short-lived, with growth occurring in the first two to three years typically dissipating after five or six years, coinciding with the end of construction.
• HPP construction significantly boosts formal employment in the short term, with an average increase of 10% to 37% in the first year, though this levels off to between 8% and 14% after five years.
• There is extreme variation in employment outcomes across municipalities; approximately 25% of studied municipalities saw formal employment at least 38% higher than non-dam areas, while another 25% saw employment 15% lower.
• The construction of hydropower plants does not result in a structural transformation of local economies, as the share of formal employment across sectors such as manufacturing, services, retail, agriculture, and construction remains unchanged.
• Total municipal revenue typically increases during the first and second years following the start of construction, eventually stabilizing at an increase of approximately 4%.
• The increase in municipal revenue is primarily driven by royalties and intergovernmental revenues rather than tax collection; while tax revenue may spike by 35% two years after a plant's arrival, this effect drops to 2.5% over the medium term.

APA

o, J. A., Szerman, D., & Costa, F. (2017). INSIGHTS RECENT HYDROPOWER PLANTS IN BRAZIL LEAD TO VARYING LOCAL ECONOMIC EFFECTS. Climate Policy Initiative. https://www.climatepolicyinitiative.org/wp-content/uploads/2017/11/Insight_Recent_Hydropower_Plants_In_Brazil_Lead_To_Varying_Local_Economics_Effects.pdf

Chicago

o, Juliano Assun, Dimitri Szerman, and Francisco Costa. INSIGHTS RECENT HYDROPOWER PLANTS IN BRAZIL LEAD TO VARYING LOCAL ECONOMIC EFFECTS. Climate Policy Initiative, 2017. https://www.climatepolicyinitiative.org/wp-content/uploads/2017/11/Insight_Recent_Hydropower_Plants_In_Brazil_Lead_To_Varying_Local_Economics_Effects.pdf.

Wikipedia

{{cite report |last1=o |first1=Juliano Assun |last2=Szerman |first2=Dimitri |last3=Costa |first3=Francisco |title=INSIGHTS RECENT HYDROPOWER PLANTS IN BRAZIL LEAD TO VARYING LOCAL ECONOMIC EFFECTS |publisher=Climate Policy Initiative |date=November 2017 |url=https://www.climatepolicyinitiative.org/wp-content/uploads/2017/11/Insight_Recent_Hydropower_Plants_In_Brazil_Lead_To_Varying_Local_Economics_Effects.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{o2017insights, author = {o, Juliano Assun and Szerman, Dimitri and Costa, Francisco}, title = {{INSIGHTS RECENT HYDROPOWER PLANTS IN BRAZIL LEAD TO VARYING LOCAL ECONOMIC EFFECTS}}, institution = {Climate Policy Initiative}, year = {2017}, month = nov, url = {https://www.climatepolicyinitiative.org/wp-content/uploads/2017/11/Insight_Recent_Hydropower_Plants_In_Brazil_Lead_To_Varying_Local_Economics_Effects.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }