Part of the problem is that dams can destroy wetlands, which are a valuable resource as they hold water like sponges and cannot be replicated by manmade storage facilities, the Switzerland-based World Wide Fund for Nature, WWF, said on Monday.
"The world's ailing rivers and the communities that depend on them face a bleak future without prompt action," the WWF said in a 15-page report, which assessed the environmental impact of six dam projects around the world.
As well as flooding valleys, dams destroy fisheries and are threatening endangered species such as the Iberian lynx and jaguars, whose natural habitats in valleys can end up under water.
"Bad dams and bad economics are apparently still alive and kicking," said Ute Collier, the author of the report.
"As the energy and water crisis tightens, we need to ensure that we choose the solutions with the least environmental damage and the greatest social benefits."
Electricity price rise
The $30 million Chalillo dam in Belize was designed to reduce electricity imports, but residents have seen prices rise since its recent completion, the report said.
It also has flooded 1000 hectares of rainforest.
Dams have displaced up to
80 million people worldwide
A project in Iceland, meanwhile, has caused local and international controversy because of its possible impact on a fragile area of Arctic wilderness, the report said.
The Karahnjukar dam - which was rejected by the country's planning agency, only to be overruled by the Environment Ministry - will flood hundreds of nesting sites of the rare pink-footed goose, and will probably destroy some of the habitat of Iceland's only reindeer herd.
"Wetlands downstream will also be affected by wind erosion of soils left exposed from construction, the draining of watersheds and the fluctuations of the water level in the reservoir," the report said.
Other dam projects investigated were the Melonares dam in Spain and Australia's Burnett dam, which the WWF said threatened endangered fish in Queensland.
The $650 million Ermenek dam in Turkey threatened wildlife in the Goksu river, whose delta is an important wetland, while the livelihoods of 50,000 people in Laos were at risk by the diverting of the river Nam Theun under a World Bank project.
At least 50,000 people who rely on the river for their livelihoods will be affected as water is diverted, affecting riverbank gardens, access to the river and loss of fish habitats.
Diverted water affects access to
rivers and fish habitats
"This is not the engineering heyday of the 1950s when dams were seen as the hallmark of development. We know dams can cause damage, and we must put this knowledge to work," the WWF's Jamie Pittock said.
According to the world commission, dams have fragmented 60% of major rivers worldwide and displaced up to 80 million people.