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As mentioned before, all energy sources impact the environment in one way or another including renewable energy resources. Hydropower is probably the most damaging to the environment. Often large dams are built to capture and store running water. These dams can inundate sizeable areas of land and alter the ecosystems of streams and rivers. While the benefits of dams may outweigh the costs for some people, the drawbacks can be devastating for downstream users. For example, dams along the Colorado River (and others) provide cheap water and power to large cities in the southwestern United States. However, water in the river is overallocated. It only intermittently flows to the Sea of Cortez, and farmers in Mexico receive a fraction of what they once did. By the time the water reaches southern Arizona, it is so high in salinity and other pollutants that a desalinization plant was installed in Yuma, Arizona, to purify the water before it crosses the border into Mexico.

Dams can also pose a problem for fish. Large reservoirs that fill up behind dams present enormous obstacles to migrating fish. Salmon are a good example. Their lifecycle involves a period in which they migrate from the ocean to streams to reproduce. By using chemical cues from their environment, these fish amazingly return to the same stream from which they hatched to spawn a new generation. However, when a river is dammed, the fish need to navigate through countless obstacles, including large reservoirs and high dams, to return to their spawning grounds. Many fish have perished on this journey. Because of dammed rivers, salmon and some other fish species are listed as threatened with extinction. Not only has the impact of dams been an important issue for wildlife conservation groups, it is one of concern to the fishing industry.

Dam issues are also important in many developing countries where large dams can potentially displace millions of people. Protests in India over the Narmada Dam projects halted the construction of several large dams because they threatened to displace thousands of people. Perhaps the most egregious example of displacement is occurring in China, where the construction of the Three Gorges Dam—what will be the largest hydroelectric dam in the world when it is completed in 2009—will displace an estimated 1.9 million people (IRN 2006). The project is so controversial that the World Bank withdrew its financial support (Kha-gram 2004, 175).

Wind and solar power also have environmental impacts. Wind turbines have been criticized by environmentalists as being a danger to migratory birds. Studies have also shown that large wind farms can impact microclimates because they displace large amounts of air. As for the issues of solar energy, photovoltaic cells pose a problem because the most efficient designs contain toxic chemicals that must be treated properly when disposed. Solar energies are also criticized for the large area of land that a solar power plant needs to produce an economically viable amount of power. This argument, however, is weak when one considers the many millions of rooftops that could generate domestic sources of power in the desert regions of the world. Finally, biomass energy can create problems if it is not managed properly. Historically, there are many instances of humans depleting their biomass resources. Depletion remains a problem in many developing countries where wood-gathering provides a main energy source used for heating and cooking.

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