CRITICAL ENVIRONMENTAL COSTS OF THE PARAGUAY-PARANA WATERWAY PROJECT IN SOUTH-AMERICA

The proposed Paraguay-Parana waterway project, know as ''Hidrovia'', would improve and develop year-round navigation by large ships and barge trains from Caceres, Brazil, to the harbor of Nueva Palmira, Uruguay. Of particular environmental concern, the project would drastically alter the river system in the previously undeveloped reach from Caceres to Corumba, Brazil, and directly affect the Pantanal. The Pantanal is one of the world's largest wetlands and is important both for the biodiversity it supports and for its regulatory impact on the downstream river system. This preliminary evaluation of the project establishes a critical value for the environmental costs that, if included in the evaluation of the project, would tip the scale in favor of preserving the Pantanal rather than developing the waterway through it. It is concluded that the environmental costs may exceed this critical value and that the waterway may be uneconomical in the Pantanal. The indication is that expenditures on further feasibility studies are likely best spent by investigating the feasibility of the project downstream from the Pantanal.