We are entering a new hydro-dam era. As John Vidal has reported, construction of hydropower in the Himalayas will be one of the great forces for change in Asia and a hot spot of regional tension between China, India, and Pakistan.

In Africa, the growth aspirations of many countries are pinned at least in part on the development of its extraordinary hydropower endowment. Only about 5% of the continent's hydropower potential has been developed thus far. But things are changing. Ethiopia's construction of the Renaissance Dam in the upper Blue Nile – which, when completed will be one of the largest dams on the continent – has sparked conflict with downstream Egypt and made headlines about water wars on the Nile. Recently, the World Bank has announced its return to financing hydropower as part of its core strategy, after almost two decades during which it has been virtually inactive in the sector.

Hydropower development has a troubled history. Relocation of people to make room for reservoirs, downstream environmental impacts from the fragmenting of rivers, and the profound modification of aquatic ecosystem – all drive legitimate concerns about the development of this type of infrastructure. But hydropower also brings essential base-load supply, a renewable source of energy, and in some cases much-needed storage capacity and flood control. Managing these competing objectives requires facing difficult trade-offs, which are not susceptible to broad-brush strokes positions.

Not yes or no, but where and how

While some dams' impacts clearly outweigh their benefits, in many places the most important question may not be whether to build a dam but rather about where and how hydropower is built. On 1 July I stood along the Penobscot River in Maine with colleagues and onlookers from partner organisations, government, local businesses and the community to watch the historic removal of the Veazie Dam.

This was the second of two major dam removals as part of the Penobscot River Restoration project – one of the largest such projects in the world. The project will greatly improve access to nearly 1,000 miles of habitat for endangered Atlantic salmon and a number of other species of native sea-run fish – many of which had dwindled from annual populations in the millions in the 1800s to only a few thousand by 2011.

In the late 1990s, after decades of conflict around re-licensing of individual dams on the river and proposals to add new dams, a single power company bought all the dams in the lower river basin. This changed the debate. Instead of taking a dam-by-dam approach, the Penobscot Indian Nation, a number of environmental groups and the Penobscot River Restoration Trust were able to work with the hydropower company and federal and state regulators to look across the river basin and find a solution that meets multiple needs. Ultimately, an agreement was reached to remove the dams while increasing fish passage and electricity generation at other less harmful sites – reestablishing river health, recreation and culture while increasing electricity generation.

Scale, risk and outcomes, looking over the horizon

This example demonstrates something important. Limiting the impacts of hydropower while harnessing its benefits is first and foremost an optimisation problem. By taking a river-basin wide perspective, the siting and construction of dams can be directed toward the least damaging places within a basin – ensuring as much of the natural flow of water, sediments, nutrients and fish are sustained as possible for the benefit of people and nature. This does not avoid the difficult trade-offs but can improve outcomes.

This is the conversation that needs to happen, and the only route to global impact. Organisations like mine have the science, some solutions and emerging ideas, but businesses and governments will be making the large-scale infrastructure investments and have the delivery capacity that will dictate our reality. This is why the Nature Conservancy and China Three Gorges Corporation have just signed an agreement to work together for the next five years. This agreement builds on our conservation work on the Yangtze River and attempts to begin exporting our lessons and practices to other international locations where Three Gorges works.

It will not be easy and we should not be under any illusion that we will always land on the same side of the debate. But if we fail to engage with the hydropower community, we will miss an enormous opportunity for positive impact. While we may at times still be at odds, working with business – and with governments where major development is occurring – is the only way to bring sustainable solutions to a scale that can alter the path we're travelling on.

Giulio Boccaletti is managing director of global water at The Nature Conservancy

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