Even though the dam is not associated with much human displacement, the social impacts will be significant. The Victoria Falls rapids represent one of the world’s best rafting spots, according to the International Rafting Federation. Water sports such as rafting and jet-boating, and land-based tourism to view the gorge scenery and Victoria Falls have created a huge tourism market, contributing to the economies of both countries as well as creating steady, long-term employment for thousands of local people. It is feared that the reservoir may not create the same amount of tourism-related benefits. Jobs resulting from dam construction will be short-term and most local people will not qualify for the highly skilled jobs associated with the project.  

It is doubtful that the local communities will benefit much from the dam. The narrow and deep nature of the reservoir may not sustain large populations of fish needed to form a viable fishery. There is no information yet on how surrounding rural communities could benefit, nor have plans been advanced for connecting them to the resultant electricity grid.

The Batoka Gorge Dam's first Environmental Impact Assessment (EIA) was carried out in 1993. The study recommended further environmental studies, which were then carried out in 1998. The dam will not inundate land since it will be confined to a long narrow gorge, but will flood all the rapids upstream and reduce the riverine natural habitat. The low settlement density in the area will minimize the number of people that need to be resettled. The gorge is a habitat for a number of rare bird species, and the project is expected to have major impacts on local endangered species. Birdlife International lists the Batoka Gorge as an 'Important Bird Area' on the basis of its conservation importance. Four species of note breed in the gorge, including the Taita falcon (a small, agile endangered raptor). Another 34 raptor species are also found in the gorge, including rare birds of prey such as Verraux's eagle (previously known as the black eagle). Since 1989, the area of the Victoria Falls is recognised as an UNESCO World Heritage Site. This area therefore needs to be protected and not damaged by the dam's impact.

The Zambezi River basin has one of the most variable climates in the world. According to the Intergovernmental Panel on Climate Change (IPCC), the Zambezi River basin is predicted to experience the worst potential effects of climate change among 11 major African river basins. Extensive research shows that climate change is expected to increase variability and vulnerability of the basin, and the Batoka dam is likely to lose 6-22% production due to declining rainfall as a result of warming climate in the basin. It is therefore very unlikely that the dam will deliver the expected service over its lifetime.