Chapter 7 sought to place the environmental concerns of hydroeconomics within the broad context of debates on the sustainability of human society. Now one moves back again to the narrower scope of project analysis, with the purpose of asking how the economist should deal with environmental impacts of water projects. Such impacts may be negative, as in the case of a dam drowning a beautiful valley or displacing tens of thousands of rural citizens. Impacts may also be positive, as in the case of the restoration of a wetland, or reversing the pollution of a lagoon with a new wastewater treatment plant, or reducing infant mortality by raising the quality of the freshwater supply. Note that the concept of “environmental impact” used here embraces both the natural world and human communities.