Abstract
Many countries have passed environmental laws aiming at preserving natural ecosystems, such as the Endangered Species Act of 1973 in the United States. Although those regulations seem to have improved preservation, they may have had unintended consequences in energy production. Here we show that while environmental constraints on hydropower may have preserved the wilderness and wildlife by restricting the development of hydroelectric projects, they led to more greenhouse gas emissions. Environmental regulations gave rise to a replacement of hydropower, which is a renewable, relatively low-emitting source of energy, with conventional fossil-fuel power, which is highly polluting. Our estimates indicate that, on average, each megawatt of fossil fuel power-generating capacity added to the grid because of environmental constraints on hydropower development led to an increase in annual carbon dioxide emissions of about 1,400 tons. Environmental regulations focusing only on the preservation of ecosystems appear to have encouraged electric utilities to substitute dirtier fuels for hydropower in electricity generation.