As I've said many times on hackernews, hydro power isn't carbon free. Land and trees are flooded to support dams. That means a reduction in carbon uptake, less room for bambi and lots of other issues. It's akin to clearcutting a forest, but at least after a clearcut the forest grows back.

It all depends on what type of area you flood. Empty desert is one thing, coastal rain forest another. Better than coal, but not perfect.