Sustainable power and scenic beauty: The Niagara River Water Diversion Treaty and its relevance today Andrei Sedoff a , Stephan Schott a,n , Bryan Karney b a Carleton University, Canada b University of Toronto, Canada HIGHLIGHTS  We examine the history of water diversion at Niagara Falls.  We examine the rationale that led to water flow restrictions over Niagara Falls and its relevance today.  We estimate the opportunity cost of foregone energy generation with the new Canadian intake capacity.  Water flow stipulations were not based on the sound scientific or ecosystem analysis.  A renegotiation of the 1950 Niagara River Water Diversion Treaty is overdue. article info Article history: Received 25 July 2013 Received in revised form 23 October 2013 Accepted 27 October 2013 Available online 2 December 2013 Keywords: Hydroelectric power International treaties History of energy exploitation abstract Niagara Falls and the Niagara River have always attracted great public interest due to their natural beauty, their enormous potential for electricity generation, their recreational value and as an important ecosystem. There have been simultaneous efforts to preserve this unique natural wonder and harness its power through hydroelectric development projects by both the United States and Canada. This paper explores the evolution of these efforts that culminated with the signing of the 1950 Niagara River Water Diversion Treaty that established minimum water flow rates to protect the “scenic beauty” of the falls, allowing the remaining water to be diverted for power production. We examine the rationale that led to specific water flow restrictions and question to what extent they are relevant today, as water intake capacity on the Canadian side has just been extended by around 25%. We find that current restrictions under the Niagara River Water Treaty (that expired in 2000) are not based on sound scientific evidence and estimate the upper limit of potential foregone benefits from clean electricity generation and greenhouse gas reductions. We identify a number of important issues that emerged in the last decades and that would justify an exploration of new treaty rules. & 2013 Elsevier Ltd. All rights reserved. 1. Introduction, background, and motivations Niagara is at once a unique natural wonder and a puzzling enigma. It is a place of great scenic beauty, attracting throngs of tourists every year that come to enjoy the spectacle of Niagara Falls and the Niagara River. The City of Niagara Falls estimates the annual number of visitors coming to the region at 12 million (City of Niagara Falls, 2012, p. 9). Niagara is also an incredibly important place for the generation of clean, renewable energy by both the United States (U.S.) and Canada. Sir Adam Beck – a great visionary and the first Chairman of the Hydro-Electric Power Commission of Ontario – once said, “[t]he gifts of nature are for the public” when describing his quest to capture the enormous hydropower poten- tial of Niagara (Niagara Parks Commission, 2012a). Beck went on to oversee the construction of the Queenston Chippawa Power Station, which was – at the time – the largest power station in the world (Niagara Parks Commission, 2012a). As of 2013, there are two major power stations operating at Niagara – the Sir Adam Beck (SAB) complex on the Canadian side and the Robert Moses power station on the U.S. side. The 1950 Niagara River Water Diversion Treaty governs the diversion of water from the Niagara River, which is used to power the two stations. The treaty restricts the amount of water that may be diverted in order to preserve the scenic spectacle of Niagara. The treaty officially expired in 2000, and it is surprising that it has not already been reexamined particularly as Ontario Power Gen- eration’s recently invested $1.6 billion (Canadian Geographic, Contents lists available at ScienceDirect journal homepage: www.elsevier.com/locate/enpol Energy Policy 0301-4215/$ - see front matter & 2013 Elsevier Ltd. All rights reserved. http://dx.doi.org/10.1016/j.enpol.2013.10.060 n Corresponding author. Tel.: þ1 613 520 2600x2557; Fax: þ1 613 520 2551. E-mail addresses: stephan_schott@carleton.ca, stephan.schott@gmail.com (S. Schott). Energy Policy 66 (2014) 526–536