3 Major Droughts In Panama Since 1997; The Current Drought Cost $1 Billion In Shipping Losses In 2023

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The canal remains a priority as, 110 years after its inauguration, the infrastructure that revolutionised logistics and global trade in the 20th century continues to be the backbone of Panama’s economy, generating about $4bn (£3bn) in revenues a year, with direct payments of about $2.5bn (£1.93bn) to the government. “When it rains a bit, like last year, we lose $1bn (£770m) in revenues. Now, we are expanding the watershed to make sure we always have enough water for the canal,” says Navarro. “We must take all measures that allow us to become more resilient.”

Panama’s concerns are justified. Since 1997, three significant droughts have threatened the canal’s operations, says Steven Paton of the Smithsonian Tropical Research Institute, who monitors tropical climate and oceans. He confirms growing worries about the sustainability of water levels in the Panama Canal given changing climate patterns.

The canal recorded historically low water levels last year, says Paton, which could be repeated due to increasingly frequent El Niño events. After the drought, 2024 recorded nearly average precipitation and weather conditions, allowing Lake Gatun to replenish after dramatic fluctuations over the past two decades. But Paton says that severe climate events will continue threatening the canal, as in 2010, when the La Purisima storm nearly overflowed the canal’s dams.

Climate change models indicate periods of more pronounced precipitation and longer dry spells – consistent with patterns in the canal’s watershed, which has experienced decade-long average rainfall changes of up to 20%. “The most important thing [governments] could do is protect the forest cover in the canal area and the watershed, and that’s what they are doing,” says Paton. “The forest acts like a huge sponge.”

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https://www.theguardian.com/global-development/2024/nov/07/resilient-climate-crisis-threatens-panama-canal-juan-carlos-navarro-sustainability-economic-growth