ESG RISK 12: Climate Change
Overview
ESG Risk 12 – Climate Change and GHG Emissions assesses a hydropower project’s lifecycle greenhouse-gas intensity and its sensitivity to climate-driven hydrological shifts. It benchmarks projected emissions (IPCC median 24 gCO₂ eq/kWh) against fossil alternatives and uses power-density proxies (e.g., > 5 W/m² typically yields < 100 gCO₂ eq/kWh) to flag high-emission sites. For detailed forecasts, the G-res Tool models reservoir-related emissions. The criterion also considers broader system benefits of cascade schemes and pumped storage as enablers of renewables. Early climate-vulnerability analysis—incorporating future flow, temperature and extreme-weather scenarios and adaptation measures—helps ensure resilience. An Extreme Risk score here warns of costly delays, operational gaps and diminished financing appetite.
Additional Guidance
Some hydropower projects have raised concerns regarding their reservoir greenhouse gases (GHGs). Emissions relating to the construction and operation of a reservoir will vary depending on its type, size and location. Emissions from reservoirs tend to be highest in the first 10 to 20 years immediately following reservoir impoundment, then decrease over time. Once filled, factors such as a reservoir depth and shape, the amount of sun reaching its floor, and wind speed affect the different biogeochemical pathways by which carbon dioxide (CO₂) and methane (CH₄) are created and released to the atmosphere. A reservoir will release GHGs due to the decomposition of flooded organic material under certain conditions. In other conditions, a reservoir may act as carbon sink, i.e. absorbing more emissions than it emits.
In the situation of little to no sources of information relevant to the area of the project option, users of HYDROSELECT should make reasonable estimations based on core criteria for the project option influencing MW capacity and reservoir area. Estimations should allow a worst-case scenario to be calculated. Using a higher accuracy method of reservoir size determination will, in time, increase confidence in initial estimations if the project were to proceed.
Estimating the degree of vulnerability of a potential hydropower project option to climate change impacts will involve analyses of historical climate data and future climate projections for the location of the project option.
Potential sources for historical climate data include:
Regional or local environmental and climate agencies.
National meteorological agencies.
Global climate databases such as the World Meteorological Organization (WMO).
Climate data portals such as: Climate Data Online (CDO) from the US National Oceanic and Atmospheric Administration (NOAA); the NASA Earth Data.
Universities and research institutions that may maintain climate databases for specific research purposes.
Potential sources for future climate projections include:
National meteorological or climate agencies that offer regional climate projections.
Regional climate modeling efforts focused on specific geographical areas.
The Intergovernmental Panel on Climate Change (IPCC) for comprehensive climate projections based on various models and scenarios, and reports including global and regional projections.
The World Bank’s Climate Change Knowledge Portal (CCKP) for global data on historical and future climate, vulnerabilities, and impacts; users can explore visualistions of the data and projections via both country and watershed views.
WorldClim for high-resolution climate data, including future projections based on different scenarios.
In time, collecting extensive field data over long periods, alongside incorporating predictive climate change models, will increase confidence in planning for climate-change vulnerabilities to hydrological resource risks.
Opportunities for early stage actions that could reduce the risk for a project option might include:
Calculating the likely power density for a range of project options so that only the low carbon emission options are further considered.
Consideration of alternative design or location.
Use a higher accuracy method of reservoir size determination to increase confidence in initial estimation.
Implement mitigation strategies before impoundment.
