Despite the numerous advantages of large dams, there is still a deep suspicion about the real,
long-term benefits and costs of their construction. Land use change on a vast scale, displacement of a large
population of indigenous people, loss of biodiversity and production of greenhouse gas emissions, as well as environmental, socioeconomic and cultural consequences resulting therefrom, indicate clearly the need to
reconsider the growing trend of dam construction in the world. The present study was conducted to calculate
the real cost of generating electricity imposed on communities and environment in order to clarify the adverse socioeconomic impacts of large dams that are often ignored due to short-term, economic benefits. Accordingly, Alborz Dam, a large dam in northern Iran, was selected as a case study to run cost-benefit analysis by SIMPACTS Software. The obtained results revealed that the total external cost of electricity generation by the hydropower dam is about 0.16 US$/kWh. In other words, the annual cost of the electricity generation by Alborz Hydropower Plant is US$ 4.8 million/year. The highest share (163 US$/MWh) belongs to the loss of agricultural production while the lowest cost (0.10 US$/MWh) is associated with the loss of life. According to the estimated values, a total amount of 1074 tons of greenhouse gas emissions is expected to be released into the air by the hydropower dam operation. It should be stated that SIMPACTS Software only considers the adverse effects of hydropower dams and there is a need to improve the capability of the software by adding the positive impacts in to the overall computations, as well.