Ecological and economic context of the proposed Paraguay-Parana Hidrovia and implications for decision making

This chapter contrasts different approaches to assessment of the costs and benefits of the development of the Hidrovia, with emphasis on potential impacts on the Pantanal, and on implications for decision-making of using the information derived from these different approaches. We begin by illustrating the relationship of the flood/drought cycle, to its extremely rich biodiversity, and its importance to the human economy. We then show how both are vulnerable to small changes in water levels that could be brought about by development of the Hidrovia, and the cumulative impacts of other development that would be supported by it. The costs and benefits of these and other changes are difficult to value because they are related to conflicting social objectives, including geopolitical considerations, diverse stakeholder perspectives, and to goods and services with significant non-market and subsistence values. Also, given the complexity of the problem and inherent uncertainty, attempts to analyze costs and benefits all rest on questionable and often arbitrary assumptions, and depend on the interests and perspectives that have a voice in the decision-making process, and on how the problem is defined. In new kinds of complex problems such as this, that are beyond the response capacity of existing institutions, an adaptive approach to valuation is suggested, that provides stakeholders with opportunities for mutual learning, to reframe the problem in a broader context that includes cumulative impacts of further regional development that would be supported by the Hidrovia, to reconsider their values in light of new information, and to engage in a process of negotiation and conflict resolution regarding what is to be sustained. The results of this process can then provide a set of criteria for evaluating the success of development efforts, and to identify inevitable tradeoffs. Valuation becomes an institutional problem, of access to the decision-making process. The value of a participatory process, and the costs of not including stakeholders, are discussed with reference to case studies elsewhere.