The global debate about large dams is at once overwhelmingly complex and fundamentally simple. It is complex because the issues are not confined to the design, construction and operation of dams themselves but embrace the range of social, environmental and political choices on which the human aspiration to development and improved well-being depend. Dams fundamentally alter rivers and the use of a natural resource, frequently entailing a reallocation of benefits from local riparian users to new groups of beneficiaries at a regional or national level. At the heart of the dams debate are issues of equity, governance, justice and power - issues that underlie the many intractable problems faced by humanity.

The dams debate is simple because behind the array of facts and figures, of economic statistics and engineering calculations, lie a number of basic and easily understood principles. If adhered to and routinely applied, these principles would not only go a long way towards responding to the controversy surrounding dams, but would markedly improve decision-making on water and energy resources, achieving better outcomes. In identifying these principles, the World Commission on Dams (WCD) has not had to look far; they are the same principles that emerge from the global commitments to human rights, development and sustainability. Our report tells a multifaceted story. But we draw from it some straightforward and practical advice to guide future decisions on water and energy resources development.

The report sets out to distil more than two years of intense study, dialogue and reflection by the Commission, the WCD Secretariat, the WCD Stakeholders' Forum and literally hundreds of individual experts and affected people on every aspect of the dams debate. It contains all the significant findings that result from this work and expresses everything that the Commission believes is important to communicate to governments, the private sector, civil society actors and affected peoples - in short, to the entire spectrum of participants in the dams debate. The evidence we present is compelling. We feel confident that the material collected and analysed by the Commission provides overwhelming support for the main messages in the report.

We believe there can no longer be any justifiable doubt about the following:

• Dams have made an important and significant contribution to human development, and the benefits derived from them have been considerable.
• In too many cases an unacceptable and often unnecessary price has been paid to secure those benefits, especially in social and environmental terms, by people displaced, by communities downstream, by taxpayers and by the natural environment.
• Lack of equity in the distribution of benefits has called into question the value of many dams in meeting water and energy development needs when compared with the alternatives.
• By bringing to the table all those whose rights are involved and who bear the risks associated with different options for water and energy resources development, the conditions for a positive resolution of competing interests and conflicts are created.
• Negotiating outcomes will greatly improve the development effectiveness of water and energy projects by eliminating unfavourable projects at an early stage, and by offering as a choice only those options that key stakeholders agree represent the best ones to meet the needs in question.

The direction we must take is clear. It is to break through the traditional boundaries of thinking and look at these issues from a different perspective. Our recommendations develop a rationale and framework that responds to this critical need and offers scope for progress that no single perspective can offer on its own. It will ensure that decision-making on water and energy development:

• reflects a comprehensive approach to integrating social, environmental and economic dimensions of development;
• creates greater levels of transparency and certainty for all involved; and
• increases levels of confidence in the ability of nations and communities to meet their future water and energy needs.

There are no shortcuts to equitable and sustainable development. The evidence of success and failure we present in this report provides the best rationale why the 'business as usual' scenario is neither a feasible nor a desirable option.

Water and Development - The Changing Context

The key decisions are not about dams as such, but about options for water and energy development. They relate directly to one of the greatest challenges facing the world in this new century - the need to rethink the management of freshwater resources. A number of global initiatives and reports have documented the dramatic impact of human-induced water withdrawals from the world's lakes, rivers and ground aquifers. Total annual freshwater withdrawals today are estimated at 3 800 cubic kilometres - twice as much as just 50 years ago.

The unfolding scenario for water use in many parts of the world is one of increasing concern about access, equity and the response to growing needs. This affects relations:

within and between nations;
between rural and urban populations;
between upstream and downstream interests;
between agricultural, industrial and domestic sectors; and
between human needs and the requirements of a healthy environment.

The challenge is not to mobilise so as to compete successfully, but to co-operate in reconciling competing needs. It is to find ways of sharing water resources equitably and sustainably - ways that meet the needs of all people as well as those of the environment and economic development. These needs are all intertwined, and our challenge is to resolve competing interests collectively. Achieving equitable and sustainable solutions will be to the ultimate benefit of all. The imperative to supply growing populations and economies with water in a context of depleting groundwater resources, declining water quality and increasingly severe limits to surface water extraction has brought sustainable water resources management to the top of the global development agenda. Although increasing competition for water suggests an expanding scope for conflict, it also provides an incentive for new forms of co-operation and innovation.

Dire scenarios for water demand must not overshadow the fact that development paths that meet and manage the demand exist and are available for us to choose. History demonstrates that the path of co-operation has more often been followed than the path of conflict. The same must be true for our future.

During the 20th century, large dams emerged as one of the most significant and visible tools for the management of water resources. The more than 45 000 large dams around the world have played an important role in helping communities and economies harness water resources for food production, energy generation, flood control and domestic use.

Current estimates suggest that some 30-40% of irrigated land worldwide now relies on dams and that dams generate 19% of world electricity. From the 1930s to the 1970s, the construction of large dams became - in the eyes of many -synonymous with development and economic progress. Viewed as symbols of modernisation and humanity's ability to harness nature, dam construction accelerated dramatically. This trend peaked in the 1970s, when on average two or three large dams were commissioned each day somewhere in the world.

While the immediate benefits were widely believed sufficient to justify the enormous investments made - total investment in large dams worldwide is estimated at more than $2 trillion - secondary and tertiary benefits were also often cited. These included food security considerations, local employment and skills development, rural electrification and the expansion of physical and social infrastructure such as roads and schools. The benefits were regarded as selfevident, while the construction and operational costs tended to be limited to economic and financial considerations that justified dams as a highly competitive option. As experience accumulated and better information on the performance and consequences of dams became available, the full cost of large dams began to emerge as a serious public concern. Driven by information on the impacts of dams on people, river basins and ecosystems, as well as their economic performance, opposition began to grow. Debate and controversy initially focused on specific dams and their local impacts. Gradually these locally driven conflicts evolved into a global debate about the costs and benefits of dams. Global estimates of the magnitude of impacts include some 40-80 million people displaced by dams while 60% of the world's rivers have been affected by dams and diversions. The nature and magnitude of the impacts of dams on affected communities and on the environment have now become established as key issues in the debate.

The World Commission on Dams was born from this debate. Established in February 1998 through an unprecedented process of dialogue and negotiation involving representatives of the public, private and civil society sectors, it began work in May of that year under the Chairmanship of Professor Kader Asmal, then South Africa's Minister of Water Affairs and Forestry and later the Minister of Education. The Commission's 12 members were chosen to reflect regional diversity, expertise and stakeholder perspectives.

The WCD was created as an independent body, with each member serving in an individual capacity and none representing an institution or a country. The Commission's two objectives were:

• to review the development effectiveness of large dams and assess alternatives for water resources and energy development; and
  
• to develop internationally acceptable criteria, guidelines and standards, where appropriate, for the planning, design, appraisal, construction, operation, monitoring and decommissioning of dams.

The decision to proceed with a large dam, the way the decision was made, the opinions and perspectives that were heard are at the heart of the current debate about dams. This same question of choice - of decisionmaking - also lay at the heart of the Commission's work. Our report is about improving the way such decisions are made.

The WCD Global Review of Large Dams

A large part of the Commission's work involved a broad and independent review of the experience with large dams. The resulting WCD Knowledge Base includes eight detailed case studies of large dams, country reviews for India and China, a briefing paper for Russia and the Newly Independent States, a Cross-Check Survey of 125 existing dams, 17 thematic Review papers, as well as the results of public consultations and more than 900 submissions made available to the Commission. This provided the basis for the assessment of the technical, financial, economic, environmental and social performance of large dams, and the review of their alternatives. The review underlined the critical issues relating to governance and compliance that have come to be associated with large dams. The evaluation was based on the targets set for large dams by their proponents - the criteria that provided the basis for government approval. In reviewing this experience the Commission has studied a broad spectrum of dams. Its analysis gave particular attention to understanding the reasons why, how and where dams did not achieve their intended outcome or indeed produced unanticipated outcomes that explain the issues underlying the dams debate. Presenting this analysis does not overlook the substantial benefits derived from dams but rather raises the question of why some dams achieve their goals while others fail.

Performance of large dams

The knowledge base indicates that shortfalls in technical, financial and economic performance have occurred and are compounded by significant social and environmental impacts, the costs of which are often disproportionately borne by poor people, indigenous peoples and other vulnerable groups. Given the large capital investment in large dams, the Commission was disturbed to find that substantive evaluations of completed projects are few in number, narrow in scope, poorly integrated across impact categories and scales, and inadequately linked to decisions on operations. In assessing the large dams reviewed by the Commission we found that:

• Large dams display a high degree of variability in delivering predicted water and electricity services - and related social benefits - with a considerable portion falling short of physical and economic targets, while others continue generating benefits after 30 to 40 years.
  
• Large dams have demonstrated a marked tendency towards schedule delays and significant cost overruns.
  
• Large dams designed to deliver irrigation services have typically fallen short of physical targets, did not recover their costs and have been less profitable in economic terms than expected.
  
• Large hydropower dams tend to perform closer to, but still below, targets for power generation, generally meet their financial targets but demonstrate variable economic performance relative to targets, with a number of notable underand over-performers.
  
• Large dams generally have a range of extensive impacts on rivers, watersheds and aquatic ecosystems - these impacts are more negative than positive and, in many cases, have led to irreversible loss of species and ecosystems.
  
• Efforts to date to counter the ecosystem impacts of large dams have met with limited success owing to the lack of attention to anticipating and avoiding impacts, the poor quality and uncertainty of predictions, the difficulty of coping with all impacts, and the only partial implementation and success of mitigation measures.
  
• Pervasive and systematic failure to assess the range of potential negative impacts and implement adequate mitigation, resettlement and development programmes for the displaced, and the failure to account for the consequences of large dams for downstream livelihoods have led to the impoverishment and suffering of millions, giving rise to growing opposition to dams by affected communities worldwide.
  
• Since the environmental and social costs of large dams have been poorly accounted for in economic terms, the true profitability of these schemes remains elusive.
  

Perhaps of most significance is the fact that social groups bearing the social and environmental costs and risks of large dams, especially the poor, vulnerable and future generations, are often not the same groups that receive the water and electricity services, nor the social and economic benefits from these. Applying a 'balancesheet' approach to assess the costs and benefits of large dams, where large inequities exist in the distribution of these costs and benefits, is seen as unacceptable given existing commitments to human rights and sustainable development