For over 100 years, the Panama Canal has been a staple of world trade, allowing cargo ships to avoid the long, tricky route around the southernmost tip of South America. Now things may have to change.
Since it opened back in 1914, the canal has supported the apparently unstoppable transfer of goods around the globe. In 1916, 800 ships undertook the eight to ten hour shortcut between the Pacific and Atlantic oceans. In 2018, around 15,000 made the journey – that’s around 40 a day.
But the canal is in trouble – it is running low on water. “Over the past four or five years, there have been significant decreases in the amount of water that the watershed has received,” says Hugo Contreras, water security director for Latin America at the Nature Conservancy.
Last week, the canal’s administering authority released analysis showing that 2019 was the fifth driest year for 70 years for the area, with rainfall 20 per cent below the historic average. “Historically, the months of October and November are the rainiest,” says Ricaurte Vásquez, administrator of the canal, at a press conference. But last year the rain in the Canal Basin was 34 per cent and 27 per cent below its historic average in October and November respectively, he said. At the same time, temperature rise has led to a ten per cent rise in evaporation from the reservoirs which supply the canal.
All this spells trouble for the system of waterways and artificial reservoirs that have been developed to support the canal’s lock mechanism, which requires millions of gallons of fresh water pouring into it to transfer ships across.
The worry is that the nearby Gatún reservoir now has too low a reserve of water to face the dry season, which is just beginning now and, in a worst case scenario, could last as late as July. The reservoir began 2020 with a depth of 84 feet, 10 per cent short of the amount needed to operate without restrictions during a typical dry season, the canal authority said.
Last year water depths in the canal reached such low levels that limits had to be imposed on the amount of cargo that ships could cross with. Any spillover had to be offloaded and moved by other means overland. “We have a [water] deficit, we were dragging this deficit,” says Rita Spadafora, executive director of Ancon, a Panamese environmental non-profit. “We’re going to have cycles that are going to be very, very bad. We know we need to do something.”
Central America is one of the most exposed areas to climate change globally, and Panama is no exception. Parts of the country, such as the San Blas islands, are already being threatened by sea level rise, says Gustavo Cárdenas, a Panamanian geographer who is now studying climate change impacts on water in Prague.
Extreme rainfall events are also bringing flooding, he adds. Despite the drought seen in last year’s dry season, Panama City was still hit by flooding a few months later when the wet season came. Flooding even caused the canal to close for a day back in 2010.
The canal region has already seen a temperature rise of an estimated 1.1C, and this could reach up to 3.6C by 2100. But last year was also a particularly dry year due to an especially severe El Niño weather phenomenon. It is not yet clear whether there could be another El Niño this year. But the region is already seeing more frequent events, says Cárdenas. “It’s one of the effects of climate change, that the distance closes between one event and the next.”
Panama’s president, Laurentino Cortizo, has blamed the current lack of water on climate change, as has the canal authority. “The impact of climate change is quite evident on the Panama Canal,” Vasquez said at a ceremony two weeks ago marking two decades of Panama’s control of the canal.
Panama is one of 36 countries that includes no emissions reduction target in its climate pledge for the Paris Agreement. However, Panama is responsible for just 0.03 per cent of global emissions, one 30th of the amount the UK emits. But the story is also not as simple as climate impacts alone, according to Contreras. “Over the years there have been several factors acting at the same time,” he says. “It’s not single cause problem, it’s a problem that’s more systematic.”
The decrease in rainfall is perhaps the most important cause, he says. But a growing population in Panama City has also led to rising demand for water. And rising agriculture in the region has degraded natural ecosystems, reducing the land’s ability to store water, he adds.
Changes to the canal itself have also put pressure on water resources. Panama completed a $5 billion (£3.8bn) expansion of the canal in 2016. This significantly increased its capacity and allows for new, bigger ships to pass – but it also requires a lot more water.
Water shortages will not just affect the Panama Canal operations, but over two million people in surrounding towns, including Panama City, who rely on the Gatún and nearby Lake Alajuela for water. However, Panama’s constitution is clear that human use must be prioritised over other uses. “I wasn’t aware of a huge problem in Panama City [last year],” says Spadafora. “I would say that for the most part, we didn’t suffer any water shortages.”
But as climate impacts continue to bite, the long term ambition of the canal could be put at risk, says Contreras. “It’s not only what is happening now in the short term, because I’m sure they will solve it somehow. But the question is, what’s going to happen into the future? What are the alternatives that they should be looking into?”
The canal authority has already taken several short term steps to try to increase the amount of water available, such as a suspension of electricity generation from the nearby Gatún hydroelectric dam since 2018.
In response to the low water levels, Vásquez set out several new measures, including a new freshwater fee which ships passing through the canal will have to pay. It has also reduced the available number of pre-booked slots for ships from 32 to 27. The hope is, these measures will lead to a temporary reduction in the number of ships arriving at the canal, as well as raising much needed cash to deal with the situation.
But Vásquez also emphasised the long term need for a new source of water to “reduce the exclusive dependence on the rain regime”. This will likely take the form of a third artificial lake. Plans have been in the works for this for years, but have never come to fruition. “We need more places to store the water and so we should not be postponing that decision,” said Spadafora.
Since the US handed over control of the canal to Panama 20 years ago, it has become the country’s biggest money maker, with much of the rest of the economy linked to it in one way or another. But even if a new reservoir materialises, Panama and its canal are still likely to face challenges from rising climate impacts in the decades to come.
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