Seeing the trees for the forest : compensatory afforestation in response to hydropower projects’ forest impacts in Uttarakhand, India

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MSc International Development Studies

Seeing The Trees For The Forest

Compensatory Afforestation in response to hydropower projects’ forest

impacts in Uttarakhand, India

Joseph Draisey

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Cover photo: afforested area near Phalenda Village (Draisey, 2015)

Joseph Draisey (10918736)

Msc Thesis for International Development Studies

Graduate School of Social Sciences, University of Amsterdam Supervisors: Deepa Joshi & Margreet Zwarteveen

Second reader: Mirjam Ros-Tonen Email: joe@draisey.co.uk

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ACKNOWLEDGMENTS

I would like to acknowledge and thank all the people who have helped me throughout the research and writing process, without whom this thesis would not have reached this stage. I would like to thank everyone at The People’s Science Institute in Dehradun, who were instrumental throughout the entire research process. Special mention goes to Debashish, Ravi, Neha, and Shristee for your help and assistance throughout the fieldwork. I would also like to thank all the participants throughout this research, especially all the villagers who welcomed me into their homes to share their time and experiences with me, I am indebted to you.

I would like to extend my gratitude to my supervisors, Deepa Joshi and Margreet Zwartevee for all of your guidance throughout the planning, fieldwork, and writing process. I appreciate all the time and effort you have both put into making this thesis what it is. Finally, I would like to thank all my friends and family for all your support throughout the research and writing process, especially my parents, Paul and Julia, for your unwavering help and support, and Emily Worthing for your patience and wisdom.

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ABSTRACT

This research examines to what extent communities impacted by deforestation due to hydropower projects are compensated for forest losses by Compensatory Afforestation, an Indian eco-compensation policy. This thesis takes two different perspectives, environmental economics to view the underlying rationale behind eco-compensation, and environmental justice in order to develop an understanding of the wider discourse surrounding eco-compensation and to view environmental impacts through a justice based lens. A mainly qualitative approach, consisting of interviews, focus group discussions and participatory mapping, is used to examine the impacts of deforestation and afforestation in four rural villages in the state of Uttarakhand, India.

Literature on eco-compensation has lacked sufficient research into the outcomes of the policies, especially Compensatory Afforestation, to see whether they are suitable compensation not just for the environment but for the communities living in the areas of environmental degradation and policy implementation. Therefore this research adds to the existing literature in this field by demonstrating how communities can be impacted by, and left out of, processes that are often heralded as success stories for both the environment and poverty reduction. The key conclusion drawn from this research is that Compensatory Afforestation is often unsuitable reparation for impacts to the livelihoods of project-affected communities, who are marginalized throughout the policy implementation process. This research calls for greater inclusion of local communities into the Compensatory Afforestation process, by means of greater dialogue and information sharing with the communities, as well as their inclusion in to plantation activities. Greater inclusion would not only improve the livelihoods of the communities living near the hydropower projects but would improve the Compensatory Afforestation process itself by providing improved incentives, transparency, and accountability.

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ABBREVIATIONS

CA – Compensatory Afforestation

CAMPA – Compensatory Afforestation Fund Management and Planning Authority CDM – Clean Development Mechanism

DPR – Detailed Project Report

EIA – Environmental Impact Assessment EMP – Environmental Management Plan NPV – Net Present Value

PES – Payment for Ecosystem Services PSI – People’s Science Institute

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LIST OF ILLUSTRATIONS

Figure 1. The environmental externality from hydropower development (Yu & Zu, 2012, p.894). Figure 2. Graph showing the effect of adding a pigovian tax and using it to compensate the environment (Yu & Zu, 2012, p.894).

Figure 3. Indifference curve showing the utility of the hydropower firm (Ua) and the utility of people affected by the externalities (Ub). (Yu & Zu, 2012, p.892).

Figure 4. Map showing the location of Uttarakhand within India (top left image), the location of the research location within Uttarakhand (top right), and the location of the three hydropower projects investigated (bottom). (Adapted from Swasti Power Engineering Limited, 2006, p.4). Figure 5. Hydropower projects within Uttarakhand. Legend included in diagram. (People’s Science Institute, 2012).

Figure 6. Map showing the most important areas of biodiversity in the Bhilangana Basin, Uttarakhand (People’s Science Institute 2012).

Figure 7. Map drawn by participants during the focus group discussion in Chani (FGD1). Figure 8. Map showing the walk undertaken at Baunr.

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LIST OF TABLES

Table 1. Potential local livelihoods benefits from forests. (Landell-Mills and Porras, 2002, p.15) Table 2. How hydropower project impact forests. (Adapted from Chopra et al., 2014, p.33). Annex 3. Operationalisation of concepts

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CHAPTER 1 – INTRODUCTION

Chapter Outline:

 Research objectives  Research question  Thesis outline

“Hydro – Creates electricity from flowing water. Project benefits: Preserves natural resources; promotes renewable energy generation; reduces dependency on non-renewable resources; helps spread green technology worldwide.” - Climate Neutral Now, United Nations Framework

Convention on Climate Change (2015)

Lack of access to electricity and other energy issues reduce the capability of people to escape poverty (World Bank, 2012). This issue is especially applicable to India; over 40 percent of the population, most living in rural areas, have no access to electricity and one in three businesses state that unreliable and expensive power is a serious constraint on their business. The country has an energy shortfall of between 10 and 13.5 percent (ibid.) and the demand for electricity is expected to increase dramatically in the coming years as the country continues to develop its economy.

As a solution to this, hydropower has seen a surge of support in recent years, increasingly viewed as an instrument to supply large amounts of sustainable, low cost energy over a long period (Ficci, 2014). Hydropower contributes approximately 26% to India’s generated power but it is estimated that less than a quarter (23%) of the hydro potential in India is being utilised (World Bank, 2012). Therefore, there is substantial potential for expansion of hydropower projects in India, especially in the north of the country where the Himalayas can be seen as a wealth of untapped energy.

Despite the potential for hydropower to contribute to economic and social development, hydropower projects can have negative impacts on the local environment and human living conditions (Yu & Xu, 2012). The construction and operation of the dams can cause environmental damage that includes large-scale deforestation, loss of habitats, and landslides (Singh, 2012).

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Ultimately these environmental costs are borne not just by the environment, but by broader society; especially by the communities living near the projects who rely on the environment for their livelihoods, for instance on the rivers for fishing or the forests for fodder and fuel wood. The environmental damage can span a wide area: The ministry of Environment and Forests in India defines the project-affected area as 10 kilometers, but this is an arbitrary figure, and there can be numerous negative effects on the ecology of the area beyond 10 kilometres downstream (Mibi, 2014). This threat to livelihoods over a wide area has meant that there can often be considerable resistance from communities towards hydropower; 80% of projects in the Arunachal Pradesh region of India are stuck in the Survey & Investigation phrase of development, unable to proceed due to local resistance (Choudhury and Ghosh, 2013).

Therefore there are numerous environmental, and in turn social, costs to hydropower projects. Many of these costs are external to the monetary cost of the projects, externalised to the environment and certain sections of society. In order to try to rectify these issues, national legislation such as The Forest Rights Act (2006) mandates that the environment should not be damaged unnecessarily by development orientated projects. Furthermore, legislation is in place that mandates that should the environment be damaged by development projects then it should be subsequently compensated for.

The main policy tool for environmental compensation, and the focus of this paper, is Compensatory Afforestation (CA). Conducted by the local Forest Department, and paid for by the developer, the policy dictates that when deforestation takes place, due to development projects, afforestation must be undertaken elsewhere. Due to the lack of an institutional mechanism for spending the majority of the funds gathered due to ‘forest diversion’, over 380 billion rupees have accumulated in a fund which will soon begin to be unlocked and spent due the introduction of The Compensatory Afforestation Fund Bill (2015, p.18). It is imperative, for both the environment and for the communities impacted by forest losses, that the fund is spent wisely, and therefore research in this field to help ensure prudent use is crucial. Given this imperative, the following research objectives have been formulated.

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Research Objectives

Hydropower projects have numerous and wide-ranging environmental impacts, for which there already exists considerable literature. But this thesis has aimed to extend the knowledge base by focusing on the implementation of Compensatory Afforestation, which is mandated following deforestation due to hydropower projects in India. The aim of this is to fill a gap in existing literature by exploring how effectively the environmental impacts of hydropower are environmentally compensated for by the policy; undertaken mainly from the point of view of communities living in close proximity to the projects (henceforth, pragmatically referred to in this thesis as ‘local communities’). In doing so, the aim of this research is to explore the limitations and weaknesses of Compensatory Afforestation, and if necessary to attempt to formulate solutions and recommendations for the limitations and weaknesses.

Research Question

To what extent does Compensatory Afforestation fairly and adequately address local communities’ issues regarding impacts to forests caused by hydropower projects?

 How are forests impacted by hydropower projects?

 How do communities living near hydropower projects in Uttarakhand use the forests, and how is their use impacted by the projects?

 How is the Compensatory Afforestation process implemented, and do local communities feel they are included in the process and that the end results are suitable?

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Thesis Outline

This thesis is divided into seven chapters, for which this is the end of the first. Chapter two outlines the theoretical framework that forms the backbone of this research, examining both economic and justice based viewpoints of eco-compensation, in order to examine whether eco-compensation policies can ever create a fair and just situation for local communities. Chapter three presents the methodologies used throughout this research, the reasoning behind them, and the limitations of the choices of methodology.

Chapter four is the first of two empirical chapters, and explores how people in the villages visited use the forests, how subsequent deforestation has impacted their livelihoods, as well as the wider implications of deforestation. Chapter five, the second empirical chapter, critically examines how Compensatory Afforestation has been used to compensate for deforestation and presents the issues found with the policy from the viewpoints of different villagers, officials and activists spoken to. Chapter six analyses the issues found and brings them together with other literature and the theoretical framework in a discussion that explores the requirements for justice. The final chapter, seven, draws conclusions and forms practical recommendations based on the analysis and discussion of this research.

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CHAPTER 2 – THEORETICAL FRAMEWORK

 Environmental Economics and Eco-Compensation  Environmental Justice

There are two main theoretical departure points for this research. The first is environmental-economics, utilised to explore the rationale behind eco-compensation. The second is environmental justice, which is used as a lens to view eco-compensation impacts on communities. There is a dichotomy to the two: environmental-economics views eco-compensation from the viewpoint of balancing out externalities, whilst environmental justice is inherently a lens through which environmental damage can only be seen in a negative light, and not something to be balanced against capital growth and compensated for. But the hope is that by utilising such different theories this approach can examine whether it is possible for eco-compensation to enable justice for people impacted by environmental damage, and if it can, then what are the circumstances and processes necessary to ensure that a just situation is created.

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Environmental Economics and Eco-Compensation

Section Outline:

 Introduction to eco-compensation

 Economic analysis of hydropower externalities  Eco-compensation for environmental externalities  Economic analysis of eco-compensation and welfare  Economic limitations of the model

 Concluding remarks on the economics of eco-compensation

Introduction to eco-compensation

This research will build upon a considerable amount of existing literature regarding eco-compensation. Cuperus et al. (1996) define eco-compensation policy which “aims to recover those ecological functions and natural values that still remain affected after maximum effort has been made to reduce the impact of the intervention”. This is expanded upon by Yu and Xu (2012) who elaborate on the quote by Cuperus et al. (1996), stating that it is “type of assistance to ecological damage caused during development, so as to improve the environment of the damaged area or to create, generate or design a new region with similar ecological functions and environmental quality”. Eco-compensation encompasses a wide range of mechanisms and policies, especially in practice (Zhang et al., 2010). This means that the term has come to encompass a range of incentives and disincentives, including those which have "fees, levies, taxes, tax reductions, or subsidies on resource uses to increase funding and/or incentives for conservation, environmental management and/or restoration" (Zhang & Bennett, 2011, p.11).

Pan Yue, the Chinese Vice Minister of Environmental Protection, said in a speech to the 12th_Green China Forum in 2007 that "Eco-compensation policy is not only an environmental and economic,

but also a political and strategic need. Eco-compensation policy needs to be improved to focus primarily on instruments that transfer implementation and financial costs between… those benefiting from the environment and those suffering from environmental degradation" (MEP

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2007b, quoted in Zhang et al., 2010, p.6). This quote sums up the broader aims of eco-compensation policies, to use market mechanisms to change the relative costs and benefits of different actions that affect the environment.

Such policies include Payments for Ecological Services (PES), (Wang, 2012). The aim of PES is to utilise incentives to encourage farmers or landowners to provide ecological services that conserve natural resources (Tacconi, 2012). In doing so, PES tries to incorporate natural resources into the market, and therefore to ensure that ecosystem services, which could be broadly defined as “the benefits of nature to households, communities, and economies” (Boyd & Banzhaf, 2006) are protected from anthropogenic activities that degrade them.

Therefore it is important to note that this thesis is focusing on a very specific part of eco-compensation, a form of PES whereby payments are made by the hydropower firm(s) towards the Forest Department(s) for their ecological services, specifically the afforestation and associated activities that they are mandated to undertake following development projects. Eco-compensation could be viewed through a variety of different lenses, but this thesis purposefully takes an economic lens first in order to explore the rationale behind the decision making processes, and in order to contrast and compare it with a justice based approach. This begins with an exploration of the economics behind environmental damage from development projects, before examining how eco-compensation aims to fix the damage.

Economic analysis of hydropower environmental externalities

Markets do not usually exist for the environment, or for many of the ecosystem services it provides, as environmental goods are generally both non-excludable and non-rivalrous (Gravelle and Rees, 2004), in other words people cannot be stopped from consuming them, and consumption by one person does not stop consumption by another. Due to this there are no market transactions, and therefore no price is attached to them, so they appear to be free. This in turn can lead to over-consumption relative to the optimum level of use; in the case of the environment this means that it is over-exploited. This is termed as an externality, a cost (or benefit) that affects a party who did not choose to incur that cost (or benefit) (Buchanan, 1962).

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In terms of hydropower the cost paid by the hydropower firm (the private cost) is less than the total cost borne by wider society (the total cost), who lose the ‘value’ of the environment. The difference between the two is the environmental externality. The value of the environment is often thought of as the total value of the ecosystem services it provides, for instance the crops, livestock, fresh water, climate regulation and cultural services (The Board of The Millennium Ecosystem Assessment, 2005).

This is shown more effectively in Figure 1 which shows a hypothetical case of an environmental externality. The marginal benefit (MB) line shows how much hydropower energy will be demanded for a given price (the demand curve). The marginal external cost (MEC) line shows the ‘cost’ of the hydropower energy on the environment.

The marginal private cost (MPC) shows how much each unit of hydropower costs the firm (the supply curve). In the case of hydropower this means that given the cost of each unit of hydropower and the amount people are willing to pay, the optimum amount to produce is shown by E1, and gives a quantity produced of Q1.

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As shown by Figure 1, the environmental cost (MEC) is not taken into account, as it is a public good. Therefore cost paid by the hydropower firm is less than the total cost (the total, real factors of production, which would be the MSC: the MPC plus the MEC).

As the hydropower firm is not paying the external costs (for instance the costs of water and air pollution) this means that the hydropower firm over-produces the good, relative to the socially optimum amount. As the social benefit is less than the social cost, society would be better off if the hydropower firm had produced Q0 instead of Q1 amount of hydropower energy. The end result is an inefficient hydropower market; people are purchasing and consuming a quantity of hydropower that is more than is optimum for society.

Eco-compensation for environmental externalities

As the externalities, in this case environmental damage, are not dealt with by the free market then outside intervention is necessary. There are several ways to deal with negative externalities, for instance the government could issue a ban on hydropower, the government could introduce a Pigovian tax (a tax on the good which increases the cost, lowering the quantity produced), or other market-based incentives, or the hydropower firm could financially compensate all of the parties adversely affected.

In reality a combination of these are used. In some cases, for instance in areas of very high biodiversity, the Indian government classifies the area as a national park, and does not usually allow any construction of hydropower project within the area (Singh, 2006). On top of this, hydropower companies are usually compelled to financially compensate those worst affected by the construction of the dam, such as landowners whose property will be submerged by a reservoir (Ministry of Law and Justice, 2013).

This research has focused on government regulation, specifically Compensatory Afforestation which adds an additional tax to all development projects which divert forest for use in afforestation. This additional cost is a Pigovian tax, a tax that increases the cost per unit of

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hydropower produced in order to reduce the quantity produced. According to economic theory, and as shown in Figure 1, this means that P1 is increased to P0, which causes a decrease in the quantity produced from Q1 to Q0.

Figure 2. Graph showing the effect of adding a pigovian tax and using it to compensate the environment (Yu & Zu, 2012, p.894).

The money from the tax is then used to pay for the clean-up of the externality, compensating society. In the case of Compensatory Afforestation the local Forest Department are paid to provide ecological services such as tree plantations. This compensatory measure is shown in Figure 2 as the shaded section.

Economic analysis of eco-compensation and welfare

Eco-compensation can be seen not just from the view of the marketplace, but also from the view of the utility of the hydropower firm, and project affected individuals and communities. Following an initial decrease in the utility of project affected people due to the environmental damage caused by the hydropower project, environmental compensation can be seen as an increase in utility. Looking from a welfare economics point of view, as the benefits from redistributing social resources outweigh the costs incurred by the hydropower firm, this redistribution can be seen as a

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Kaldor-Hicks efficiency improvement (as the benefits outweigh the costs).

The utility of the hydropower firm is decreased (due to the cost of the compensation) and the utility of people affected by the negative environmental externalities is increased (due to the improvement in the environment). This is shown in Figure 2, where Ua is the utility of the hydropower firm and Ub is the utility of people affected by the externalities. E1 is the starting equilibrium point and E0 is the equilibrium point after eco-compensation has taken place.

In the hypothetical example shown in Figure 2 there is a net utility gain from the eco-compensation. As the benefits gained by the local community are greater than the losses incurred by the hydropower firm, so there is an overall utility gain. This is due to the increase in efficiency described in Figure 2, whereby the previous inefficient equilibrium has been shifted to a socially optimum equilibrium.

This is shown in Figure 3 below, with a shift from E1 to E0, demonstrating the loss of utility for the hydropower company (Ua) and larger utility gain for people affected by the environmental externalities (Ub).

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people affected by the externalities (Ub). (Yu & Zu, 2012, p.892).

Economic limitations of the model

Hydropower projects, and other large development projects often transform the ecosystem and environment in an irreversible way. In the case of Compensatory Afforestation the tax levied on the projects is used to pay for the local Forest Department to undertake the ecological service of afforestation, and in turn the aim is to create other areas where the environment is better than it was before, leaving net societal utility no worse off due to the project.

The hypothetical case that has been presented and discussed throughout this section represents this logic, yet there are several issues with this economic viewpoint:

1. One of the main issues is that it can be difficult to determine what level of tax will be necessary to provide the right level of eco-compensation. In order to ‘fix’ the externality, perfect information is required: all externalities have to be perfectly accounted for, and the resulting eco-compensation has to be conducted perfectly. The Indian government

mandate that 2%-2.5% of the cost of any hydropower project must be set aside for compensation measures such as Catchment Area Treatment (Sitling, 2012). In terms of eco-compensation having a fixed level regardless of the project is counter-intuitive, as it is unimaginable that all projects will require the same level of mitigation works.

2. The model requires a perfect political situation, for instance that the hydropower firm will not lobby the government to reduce the tax level, that there will not be political pressure for hydropower projects to be undertaken and to ignore social costs, and that there will be no funds misused and no corruption in the process.

3. The model only takes into account the direct impact on humans. Biodiversity, fauna and flora are all taken into account for only as much as they provide a service to people, there is no intrinsic value to nature.

4. The model says nothing regarding equity. The aim of eco-compensation, is not to create Pareto improvements, which is a situation where at least one individual is left better off without making any other individual worse off (Sen, 1993), but instead to move towards a

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more efficient allocation of resources. This only requires that aggregate societal utility should increase. If some lose, but others gain more, then there is an increase in efficiency.

Concluding remarks on the economics of eco-compensation

Environmental economics provides a useful viewpoint for examining how the environment becomes damaged, and how eco-compensation can be viewed by some as an adequate fix for such damage. A tree lost here, and a tree planted elsewhere should balance out, meaning that a win-win situation can be created whereby development projects end up causing no net damage to the environment and therefore no utility loss to society. Yet, as this thesis will show, this is not often how such measures work in reality. All trees are not equal, some are far more important to society than others, in terms of both biodiversity and livelihoods.

Hence although this view of eco-compensation can be used to examine the rationale behind such thinking, it is necessary to go deeper in order to see the multi-faceted interests that create a discourse within which environmental damage can be seen as externalities to be fixed with capital. Therefore the next section, on environmental justice, will go beyond the economic viewpoint of eco-compensation to explore themes of justice for the people who depend on the environment. By utilising environmental justice literature the hope is that this research can go beyond pure quantitative valuations and gaze deeper into the political landscape that creates environmental damage and accepts it as a necessary economic evil (Varian, 2006).

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Environmental Justice

Section Outline:

 Introduction to Environmental Justice  Environment and Justice

 Environmental Justice and Hydropower  Environmental Justice and Eco-Compensation

Introduction to Environmental Justice

Initially environmental justice began as a political movement in the United States, in 1977 when inhabitants discovered their houses in New York were built on top of a canal filled with toxic liquids which had serious health effects on their children (Gibbs, 1982). The movement had a strong racial nature, with protesters concerned that minorities were being disproportionately affected by environmental damage (Denq et al., 2000). Following its initial movement-based nature, environmental justice evolved, often focusing on distributive justice, “theories concerning the manner in which benefits and burdens should be allocated when there is a scarcity of benefits (relative to people’s wants or needs) and a surfeit of burdens” (Wenz, 1988, p.xi). Within this it can also be seen to include theories of the environment and justice, environmental governance, political ecology and environmental law (Schlosberg, 2007).

The discourse regarding environmental justice incorporates many conditions including beliefs, institutions, social material practices, relations, and forms of political economic power; as environmental and ecological arguments naturally reflect arguments regarding society (Harvey, 1996). In this sense environmental justice is intrinsically linked with social justice, as it puts marginalized and poor people at the heart of the debate around the environment, intrinsically linking social values with environmental knowledge (Forsyth, 2008).

Therefore environmental justice can be seen as an exploration of how environmental benefits and burdens can, and perhaps should, be distributed. Justice is only necessary when the supply of

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something is limited; if everyone can have anything they desire then no such issues arise. For justice, there must be an issue of fairness between different actors, each wanting access to the same resource. Such justice does not only involve relationships across geographical scales but also across temporal scales. A good example of this is sustainable resource use: what obligations, if any, does the current generation have towards future generations.

It is therefore important to recognise that environmental justice is not a static concept, and that there are different elements and contentions within academia regarding its definition. Although at first environmental justice had a strong focus on distributive justice, since then many scholars (Fraser, 2001, 2009; Schlosberg, 2004, 2007) have come to see environmental justice as needing to move beyond this and to engage with the dimensions that create the distributive injustice.

Schlosberg (2004) in particular criticizes the focus on distributive justice, instead contending that concepts of participation and recognition are key to understanding and addressing the processes that shape inequitable distribution. He notes three core pillars at the heart of environmental justice: distribution, recognition and participation. The first of these pillars, distribution, requires that environmental benefits and costs be shared equally. The second of these pillars, recognition, requires that the diversity and experiences of communities should be recognised in decision making processes. Carruthers follows this aspect, arguing that “one of the pillars of environmental justice is a concern about procedural inequity, propelling a quest for greater political participation and more authentic citizenship” (2008, p.8). The third and final pillar, participation, states that all stakeholders should be represented fairly in political processes which shape and implement environmental policies (Schlosberg, 2004). The three notions are intertwined, as noted by Scholsberg they “are not competing notions, nor are they contradictory or antithetical. Inequitable distribution, a lack of recognition and limited participation all work to produce injustice and claims for injustice” (Scholsberg 2004, p.529).

This thesis has lent heavily on these three notions of environmental justice, as they provide an encompassing framework for eco-compensation. Environmental issues, including both environmental damage and subsequent compensation efforts, cannot be seen in isolation; hydropower projects and policies are situated within broader governance structures. The processes and systems which produce environmental damage are created and recreated across

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geographical locations, scales and time. Therefore multiple theories of environmental justice, not limited to just distributional theories, have been used to inform this research, adding dimensions which allow hydropower projects to be viewed as part of a broader framework which both encompasses and influences national and international policy and decision making. In turn this enables a critical stance to be taken regarding the exclusion of people and communities from policy processes which impact them, and to examine what a fair distribution of benefits and burdens should entail.

Environment and Justice

This research uses a broader definition of environment, not just as a concept of beautiful landscapes, but as the conception of where we live, work, and play (Novotny, 2000). For many people, especially for some rural villages, the two concepts are one and the same. The natural environment, and the environment in which they live are inseparable, due to the dependency on the local, scenic environment.

Harvey (1996, p.374) argues that under the standard economic view of environmental management, proactive and preventative interventions are discouraged in favour of remedial management. Environmental damage is seen as an accident and an issue that can be solved through follow-up interventions, which should only take place on a case by case basis where there is certain and considerable evidence of damage. This is because there is assumed to be a zero-sum trade-off between the environment and economic growth, and therefore taking too little risk with the environment means lower capital accumulation than is desirable (ibid.).

Analysing the optimum trade-off between environmental degradation and slower economic growth requires expert knowledge regarding economics, engineering, and ecology. Once in the realm of expert discourse, environmental damage can be seen as a problem to be overcome and the processes and policies of solutions can be subverted by the influence of capital. The result of this is to render environmental justice submissive to economic growth. The only time that environmental externalities are considered is when they might be a hindrance to further economic growth, at which point methods such as eco-compensation are used to ensure that the

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environment is of sufficient quality to be exploited further (ibid.).

Although the view discussed here is taking a very Marxist approach, due to the use of Harvey's thinking, it is a useful critique to investigate precisely because it argues against the narrative of environmental economics and Compensatory Afforestation; the assumption that everything can be fixed.

Environmental Justice and Hydropower

The current discourse creates a need for energy and then ways to minimise resistance are found and implemented afterward. This is because hydropower projects can be positioned within the broader objectives of economic development (Prachvuthy et al., 2014); creating the sole objective of development which in turn creates environmental and social impacts that can be taken as secondary objectives. As the state demonstrates the impacts on industrialisation, and the assumed decrease in poverty and increase in livelihoods that this entails, private firms do likewise, demonstrating the potential of increased employment and electricity (Suhardiman et al., 2014). As noted by Sze et al. (2010, p. 814), “the nature of water, like that of environmental justice and scale, is an epistemologically contested and charged terrain”. Dams and other large management systems demonstrate man’s control over nature and “embody ideologies of progress, modernity and social control” (ibid.).

Within this discourse, ‘fixing’ environmental externalities requires the state to step in with a regulatory framework that forces firms to internalize the costs of the negative environmental externalities. This first requires the environment to be quantified and therefore for the impacts and trade-offs between development and environmental sustainability to be examined within the prevailing expert discourse. Within this view, profit maximisation (and therefore financial cost minimisation) goes unquestioned, and the environmental costs are externalized and ignored as internalizing them would require reducing economic growth (Harvey, 1996).

Associated with this, it is important here to clarify the definition of ‘externalities’ utilised in this thesis. The word ‘externalities’ has been used throughout this thesis as a purely economic term, to

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describe situations in which there are costs or benefits imposed by one party on another party, which are not taken into account via the market mechanism. This is a specific definition and its choice is strategic. As discussed, the use of such language traps the discussion within a certain discourse. The word implies a problem to be fixed, an issue with quantitative outcomes that can be rearranged afterward. Therefore where the term is deployed in this thesis it is important to note the connotations that come with it: although environmental damage might be seen as an externality by a hydropower developer it would definitely not be seen as an externality by the communities impacted.

Power Structures and Marginalization

Firms responsible for hydropower development attempt to maximize profits by minimising costs. This is achieved by doing business in locations where labour costs, land prices, goods’ costs, and the potential costs from accidents, are low, and as such these locations tend to be in areas with low-income and often minority residents (Hamilton, 1995). In terms of wider economic logic, environmental damage will cause a smaller shock to property prices where property prices are low, and therefore it is an ‘optimum’ area for development projects, as “the rich are unlikely to give up an amenity ‘at any price’ whereas the poor who are least able to sustain the loss are likely to sacrifice it for a trifling sum” (Harvey, 1996, p.368).

Related to this, often areas inhabited by low-income and marginalized residents are simultaneously areas where there is weak political organisation and resistance (Sandler & Pezzullo, 2007). Areas where residents are not only poor but also marginalized mean that the local population are disempowered with weak political organization, resulting in lower cost and time expenditure necessary to implement projects due to less resistance. For the people living in such areas, falling land prices following the construction of projects and the environmental impacts they entail cause further economic loss and marginalisation.

Environmental justice tries to combat this by specifically keeping the environmental discussion outside of monetary terms, as there is “an acute recognition within the environmental justice movement that the game is lost of the poor and marginalized as soon as any problem is cast in terms of the asymmetry of money exchange (and particularly in terms of cost-benefit analysis” (Harvey, 1996, p.388). Once arguments are packaged and framed in terms of money those with

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more of it can demonstrate that any obstacle can be overcome in quantified terms. Related to this, engineering solutions “depend upon economic and utilitarian analyses that are deeply ideological, even if understood by their practitioners and advocates to be apolitical” (Sze et al., 2010, p.834). Therefore environmental justice requires an understanding of the multiple forms of knowledge and a sight to see the social and the natural dimensions, as well as both the ecological and economic dimensions, all as interconnected and interdependent.

Sustainable Materialism

In recent years, environmental justice has started to incorporate sustainable materialism (Schlosberg, 2013). This includes the development of local generation of energy, for instance solar and wind as opposed to more destructive generation, for example as is caused by hydropower. In this sense environmental justice seeks not only to resist injustices, but also to find new ways of operating which are considered just. In this sense, there is a need for praxis, for theory and practice to combine and to inform one another (ibid). This forms part of this research, highlighting injustice and expanding understanding of how and why injustice is created.

Environmental Justice and Eco-Compensation

Environmental justice challenges the standard economic view of environmental management, whereby environmental problems give way to economic growth and are fixed on an ad hoc basis after damage has occurred. In this sense it stands at odds with eco-compensation and the entire idea that environmental manipulation is desirable and can easily create win-win scenarios. The environment cannot speak for itself, it always requires people to act as interpreters. This section explores some of the ways in which both theories provide a useful lens to this research.

Despite this, development projects and environmental justice are not mutually exclusive. For instance if all hydropower construction in India is stopped then other forms of energy might be necessary that are more damaging to the environment, such as coal. On top of this, the halting of dam operations would, at least in the short term, lower the supply of energy, raising prices which would hit the poor disproportionately as they would be least able to afford the price increases. But as part of a report produced by the World Commission of Dams the authors note that “Anchoring

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its framework in a human rights based approach, the WCD recognised that dams have made an important contribution to human development, but it also condemned the ‘unacceptable’ price that has too often been paid to secure those benefits.” (WCD, 2000, 19: xxviii).

Therefore environmental damage is intrinsically damaging to the social sphere, and the two notions are to some extent inseparable. But it is possible that by seeing the potential problems, potential solutions are crowded out. Looking at the case of the Delta in California, Sze et al. (2010) note that by seeking to balance the two goals of protecting the ecosystem and using it as a water conveyance mechanism that “in the very formulation of the problem lies the obstacle to its resolution” (p.835). By taking two core issues and putting them at odds with one another, they fill a debate space, excluding the option of the two goals being compatible and excluding other questions of social and environmental justice.

In this sense, environmental justice can be used as a method for seeking solutions, as well as for examining problems. The three core elements underlined by Schlosberg's pillars (2004) as necessary for environmental justice could be utilised within an eco-compensation framework. With a fair distribution of the outcomes of eco-compensation, with fair recognition in place for communities impacted by eco-compensation and with fair participation for the communities embedded in eco-compensation policies, eco-compensation could be a far more inclusive process that creates and accommodates environmental justice. In this sense, environmental justice moves from biocentric or anthropocentric discourses to attempt to locate a middle ground to join environmental aims with empowerment.

This means that eco-compensation becomes a form of benefit-sharing, as it incorporates the idea that those impacted by the costs should share in the benefits, helping to bridge the gap between environmental damage and social justice (Label et al., 2014). The aim of this thesis is to show that it is possible for eco-compensation policy, specifically Compensatory Afforestation, to be an inclusive and just policy. This is discussed in depth in the discussion chapter (Chapter Six), following on from the methodology and empirical chapters which are presented first.

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CHAPTER 3 – RESEARCH METHODOLOGY

 Methodological Foundations  Units of Analysis & Sampling  Research Location

 Methods for Gathering Data  Ethics

 Data Analysis

Methodological Foundations

Multiple qualitative methods have been used to gather data, the aim of which was to allow for triangulation of different data sources and therefore to seek convergence across the data (Creswell, 2003). In order to attempt this, different sequential methods have been used with results from one method informing the next method (Creswell, 2003). This meant that emerging methods were used, with methods chosen based on the situation and their predicted ability to gather useful data: for example, data gathered from official reports was influential when deciding where to undertake the focus group discussions. In turn data from the focus groups was then used to inform questions for the interviews that were conducted with officials afterward. The aim of this is to allow for greater confidence in the conclusions reached, increasing both reliability and generalisability (Summer and Tribe, 2008).

The methods used have been mainly qualitative, due to the difficulty of obtaining secondary source quantitative data (such as official GIS data) and the nature of this study, which aimed to find people’s experiences and livelihoods changes due to the loss of forests or Compensatory Afforestation, which is not easily quantifiable. In line with this, the nature of the research has been emergent, starting with the collection of data and then building theory from this foundation, as it was difficult to predict what data would be gathered. Following on from this, inductive reasoning has been used meaning that the conclusions drawn from the data could be false, even if all the

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premises for it are true (Hems, 1984).

Inductive research also builds upon the pragmatic epistemology that forms the foundations of this research. Pragmatism rejects the idea that thoughts are a tool to describe and represent reality and instead claims that thoughts are an instrument for problem solving and action (James, 1909). This research aims to improve policy making, increasing the quality of the environment and in turn improving the livelihoods of project affected communities; in other words a practical consequence of the research is found and then the hypothesis is clarified. Of course, this is an ambitious target, and it is unfathomable that this thesis alone will lead to changes in Indian national policy making. Even so, it can highlight issues with policies and policy implementation, and in turn contribute towards the debate for change.

The research methodology discussed reflects this epistemology, using a form of naturalism which focuses on scientific method and employing and exploring many different methods, focusing on the ones that will give the best insight into the impacts. The data analysis also stems from this epistemology, focusing on outputs that can provide tangible changes to environmental policy. The data analysed throughout this research has highlighted key environmental issues caused by hydropower projects and key deficiencies in the eco-compensation policy that tries to remedy them. Moreover, recommendations have been drawn from the data gathered, reflecting ways in which these environmental impacts can be better managed, mitigated, and environmentally compensated.

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Units of Analysis & Sampling

Hydropower Sites

Three hydropower sites were chosen for this research: Agunda Thati, Bhilangana I, and Tehri. These hydropower dams were selected as all three sites are in the same district and situated on the same river. This means that comparisons can be drawn as more variables are controlled for; all sites fall under the same state regulations and the biodiversity nearby is likely to be similar.

The reason for picking these three specific projects within the area is due to the size differences. The first, Agunda Thati, is a small (3 MW) project, the second, Bhilangana I is a medium sized project (22.5 MW, officially small but near enough to the 25 MW cut off to classify as medium for this research) and the last, Tehri is a large (1000 MW) project (Singh, 2012). The different sizes mean their environmental impacts can be compared and preliminary conclusions drawn, aiming to deduce whether the size of hydropower projects affects the efficacy of environmental compensation and whether it is possible to apply lessons learned from a large project to a smaller project and vice versa.

Future research would benefit from researching more of the existing hydropower projects in the region, for instance the Bhilangana III project. Due to time constraints it was difficult to cover three projects, and even within those projects much more work still needs to be conducted, especially regarding Tehri Dam.

Forests

The main unit of analysis has been the forests (current and deforested) in and around villages near to the three hydropower projects selected. Forests were chosen due to several factors. Firstly, when consulting with the local NGO it became apparent that forests were a key issue in Uttarakhand and that the policy of Compensatory Afforestation had not been heavily investigated and there was much need for such research. A second factor was time constraints on the research. Given a longer period of time and more resources it would have been possible to consider a larger range of environmental impacts, but for a project lasting less than three months this was not possible. The third and perhaps the most important reason is the key role which forests play not

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just in Uttarakhand, but in the world. Sustaining biodiversity, supporting local livelihoods, and helping to mitigate climate change; forests are extremely important and therefore well deserving of the main focus.

In order to focus on the forests, one specific policy has been focused on for this research, which is Compensatory Afforestation. The policy was chosen in consultation with PSI, after a discussion regarding the topics of interest, and the policy is discussed in detail in Chapter 5. More generic afforestation (for instance plantations by NGOs and villagers) has also been researched, in order to form recommendations about how the policy could be improved.

Participants

A ‘Stakeholder Analysis’ was conducted upon arrival which aimed to identify stakeholders at different levels: local, district, state and national. Conversations with people working at a local NGO (People’s Science Institute), helped identify the largest stakeholders related to the forest impacts of hydropower projects and Compensatory Afforestation. Key villagers, environmental experts, government officials and activists were selected to interview. This purposive sampling technique was used in the selection of research participants, as although it reduces generalisability, given the time frame and nature of the research it was necessary to find people from whom the most valuable data could be gathered.

Initial contact was made with most identified stakeholders through PSI. Snowball sampling was then utilised, by asking interviewees if they knew of others who would be interested in the research. This was also the case with interviews conducted with experts, whom were often willing to recommend other experts in their field that would also be willing to discuss the topics.

Four village communities were chosen, in consultation with PSI: Chani which is near the Agunda Tati project, Phalenda which is near the Bhilangana I project, and Baunr and Padagali which are next to the Tehri reservoir (created by the Tehri hydropower project). These are referred to throughout this thesis as ‘local communities’, using the term in a very literal and pragmatic sense as the people who live in very close proximity to any part of the hydropower project and are impacted by the forest changes due to the project.

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Within these local communities it was originally proposed to use purposive sampling, as it is important that many different segments of the population are included (i.e. different ages, genders and income levels), but in reality this was hard to achieve. Men usually dominated discussions that included women and even when women were the main participants there were always men present, for instance throughout the all-women focus group discussion three men were watching constantly. Unfortunately this seemed to be the result of conducting research as a male researcher in a patriarchal society and the end result was that at no point were women spoken to alone, which may or may not have influenced their answers. It would be good practice for future research in this field to speak to women alone if possible. The failure of this research to do so should be considered a weakness.

Methodology round up

The methodology and sampling chosen are interwoven and focus on the relations between the environment, the community and the projects and policies that impact them both. This also makes this research multi-scaler, as the policy chosen is a national policy, prescribed not on an ad hoc basis but as a solution to the problem of deforestation due to all development projects across the country. Therefore these multi-scaler units of analysis try to capture the interplays between large-scale policies, large-large-scale projects, and small-large-scale communities.

Research Location

In order to research the issues of eco-compensation and environmental justice with hydropower, the location chosen was Uttarakhand, a land-locked state in the North West of India, which shares a border with Nepal to the east. Research was co-ordinated with the help of an NGO, People’s Science Institute (PSI), who work on hydropower and irrigation issues with the help of communities living in the lower Himalayan region in Uttarakhand.

Uttarakhand is located within the basin of the Ganga River and hosts numerous other rivers (Thakkar, 2013). The state currently possesses an existing capacity of 3600 megawatts (MW) of hydropower, out of a potential estimated 20,000 MW (Thakkar, 2013), meaning there is likely to

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be a huge increase in hydropower projects in coming years. Agricultural land in the region is at threat from hydropower projects, having shrunk from 791,000 hectares in 2010 to 741,000 in 2012 (Agrawal, 2013). Forest land is also under threat: Pandit & Grumbine (2012) estimate that if all 33 proposed dam projects go ahead then the state will lose a total of 5916 ha of forest, of which 25% (1479 ha) is dense forest.

This makes the research especially relevant, as the impacts of hydropower are likely to keep increasing as the size and number of projects increases (Akanda, 2012). Together, a wide range of environmental impacts mean that Uttarakhand requires further research on this topic and in turn that the conclusions drawn from the data gathered are of use in informing future policy decisions. The recommendations made can also be used to assist communities, NGOs and other stakeholders with hydropower projects elsewhere.

Within Uttarakhand the research has focused on The Bhilangana Basin, due to the number of hydropower projects in the area and the wide range of different sizes and types of projects there. Three different projects were chosen, a small hydropower project (Agunda Thati, 3 Megawatt (MW)), a medium sized hydropower project (Bhilangana I, 22.5 MW), and a very large hydropower project (Tehri Dam, currently 1000 MW with planned expansion to 2400 MW). Officially Bhilangana I is a ‘small’ project as it is under 25 Megawatts, but as it is so close to the threshold, for all intents and purposes it will be classified as a medium project. The legislative clearances required for small projects are less rigorous than for projects that are 25MW or above, which have to be cleared by central government (Comptroller and Auditor General of India, p.2, 2009). Therefore, if one were being cynical, one might assume that this is the reason why there are multiple small projects on the river just below the threshold as opposed to one larger one. For example on the same river, Bhilangana I is 22.5MW, Bhilangana III is 24MW, and there are another three planned, Bhilangana-II-2A, Bhilangana-II-2B and Bhilangana-II-2C, all of which are 24MW each (UJNV Limited, 2015). With more time it would be very useful to look at more projects, in more areas, but due to time constraints these were the three that were chosen due to their range of sizes (small, medium, large) and type (two run-of-the-river, and one reservoir, respectively). The villages visited will be discussed in detail in the next chapter.

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The following maps show the location of the hydropower projects being investigated within India (Figure 4), as well as some broader context by showing the number of projects in Uttarakhand (Figure 5).

Figure 4. Showing the location of Uttarakhand1_{within India (top left image), the location of the} research location within Uttarakhand (top right), and the location of the three hydropower projects investigated (bottom). Agunda Thati (3 MW) is circled in green, Bhilangana I (22.5 MW) is circled in red, and Tehri Dam (1000 MW) is circled in blue. (Adapted from Swasti Power Engineering Limited, 2006, p.4).

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Figure 5. Hydropower projects within Uttarakhand. Legend included in diagram. (People's Science Institute, 2012).

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Methods for Gathering Data

Literature Review

A literature review was the first data gathering method which was utilised, sourced from the local NGO, government departments, and the internet. A wide range of pre-existing literature such as legislation, official documentation regarding the implementation of Compensatory Afforestation, news articles, and literature regarding similar research in the region were comprehensively reviewed. This was to avoid repeating data collection and ensure that this was original research exploring a new topic area and filling a knowledge gap. On top of this the literature review helped to ensure that research and methodology was well informed and of a high standard.

Field Diary

A field diary was kept throughout the fieldwork research, in order to reflect on thoughts throughout the experience and also to help note the epistemological and ontological stances of the researcher. Schwartz and Schwartz (1955) argue that bias will always exist, but that by making the positionality of the researcher clear then others can draw their own conclusions regarding the research. This diary has assisted in recording thoughts and thereby highlighting and mitigating some of the bias inherent in qualitative research.

Interviews

Interviews were a primary source of information gathering and were conducted with a wide range of stakeholders and experts including villagers impacted by deforestation, researchers, politicians and activists. The interview participants were selected either during the stakeholder analysis in consultation with the NGO, or as the result of other interviews or methods, for instance following a literature review when there were still knowledge gaps in a topic.

Where possible and suitable, interviews were conducted informally as this allows for participant reflexivity and for the opportunity for the researcher to demonstrate their understanding of what the participants are saying (Al-Hindi & Kawabata, 2002). In many cases this informality was more culturally appropriate and the NGO had suggested that many interviews would be in informal

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settings, often framed as a discussion over chai tea as opposed to a formal interview setting. On the other hand, certain interviews were the polar opposite, conducted in very formal and confidential settings. Examples of this include virtually all of the interviews with government officials or experts. It was necessary to adopt this style of interviewing due to the nature of the interviewees and the information they had to share. However, this is recognised as a limitation of the research because it was not possible to record all interviews due to their confidential nature. Future research would be improved if it was possible to have more public figures and field experts expressing their opinion on record, which could facilitate improvements in the way Compensatory Afforestation is conducted; but this seems unlikely given the climate of secrecy I encountered when interviewing anyone related to a government department.

Focus Groups

Focus group discussions were utilised, with one at each of the four villages visited. The questions asked to focus groups were based on queries which arose from reviewing secondary sources and also queries stemming from previous interviews with other stakeholders. Focus groups seemed a more natural way to gather data, as crowds would often naturally form when conducting one to one interviews, as their family and friends inquired about what was happening. Household interviews were used at Chani, but the same people would then usually go to the focus group discussion, leading to a repetition of data and annoying the participants, therefore subsequent village visits only utilised focus group discussions.

Focus groups were also a good way to gain valid information about a local location, as the participants could reflect amongst themselves as to what environmental changes have taken place, which hopefully increased the credibility of the knowledge shared. Additionally, the use of focus groups allows the researcher to gain further insights into peoples’ perceptions, opinions and attitudes towards issues that have been raised, although this could have raised issues with social desirability bias (Crowne & Marlowe, 1960). To avoid this, questions attempted to avoid potentially sensitive cultural issues and instead focused on more ‘objective’ issues such as asking which areas have been deforested and where afforestation has taken place.

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Participatory Mapping

This research method was only used in one instance due to advice from PSI that it would not be suitable for many villagers. Additionally, monsoon rains made it difficult to use paper and pens. On the one occasion when this method was utilised it was a great success with many different members of the village, including children, participating in creating the map. In future research, preferably conducted outside of the monsoon season, it would be useful to conduct considerable participatory mapping as it not only gathers useful data (i.e. areas where deforestation has taken place) but also gives the researcher a better understanding of the area and helps to bring a wider range of people into the research.

GIS Mapping

The original proposal planned to make extensive use of GIS mapping in order to gain a deeper understanding of how the environment has changed due to hydropower projects, focusing on where deforestation and afforestation have taken place. This plan was to compare data found with data found in official documents to check their validity, for instance whether the correct amounts of afforestation had taken place.

In reality this did not prove to be possible. The majority of areas where afforestation has occurred are largely inaccessible. One patch was estimated by a villager to be a 35km walk over the hills which was not feasible, especially during monsoon season. In the absence of primary GIS data, an attempt was made to obtain secondary GIS data from government officials, but this was almost impossible to get clearance for due to the researcher being foreign.

One map, using GPS tracking, has been created, which helps show how deforestation due to submergence has affected one village near Tehri. It is a great visual aid when showing the impacts of forest changes on local communities, and more like it would greatly enhance further work on this topic. The failure of this research to gather GIS data is a key weakness of this research. GIS would have benefited and strengthened this research by reinforcing or invalidating participants’ claims regarding the location and amount of deforestation and afforestation.

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Concluding remarks

Overall the methods chosen were in consultation with PSI and regarded as the most suitable for this research. Additional time conducting research in a greater number of villages, together with more detailed GIS mapping information would have been extremely useful, but the methods used have been more than enough to show the discord between the ‘official’ narrative and on the ground reality, as well as to make suggestions for improving Compensatory Afforestation.

Ethics

Ethical considerations form a key part of any research project and ethical research should focus on the principle of “do no harm” before any other objectives are taken into account (Mikkelsen, 2005, pp.325). Therefore the principle of do no harm forms the first of nine pillars of ethics that have been followed throughout this research. The second pillar is objectivity. All research that has been conducted has tried to be as objective as possible. The third pillar is honesty. Everyone involved in the research, especially participants, have been fully informed of the intentions of the research. The fourth pillar is integrity. This is for both for the researcher and the research. The fifth pillar is the respect for intellectual property rights. The sixth pillar is confidentiality, as some parts of the research address politically sensitive topics, so all information used is both confidential and anonymous. No names will have been used in the final report except where it is both necessary and informed consent (the seventh pillar) has been obtained.

The eighth pillar is voluntary participation. The ninth and final pillar, which relates to this is the consideration of power relationships. When conducting research there are inevitable power relations, for instance the researcher being a male and conducting research in a patriarchal society. Whilst there is no way to change the basic premise, where possible participants have been fully informed of the research objectives, and made to feel at ease (for instance with the use of culturally appropriate greetings).

Together, these nine points have been followed as far as possible in order to ensure that all research has been conducted in an ethical fashion. Additionally respondents have been asked if they would like a copy of the draft and final thesis, in order to both check they approve of the way

Seeing the trees for the forest : compensatory afforestation in response to hydropower projects’ forest impacts in Uttarakhand, India

MSc International Development Studies