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Rodolfo Sabonge served for 27 years as the Vice President for Planning and Development at the Panama Canal Authority. During the keynote remarks for the annual Climate Mobility Summit in September 2022, Mr. Sabonge briefly discussed the scenario design work he and his team undertook in the mid-1990s. Each scenario demonstrated the range of impacts climate change could have on the Canal’s operations. Among these scenarios – the most extreme one – was dubbed “Mad Max” by Mr. Sabonge and his colleagues. He says this is the scenario the canal is currently heading towards.
The United States reaps many security and commercial benefits from a smoothly operating Panama Canal and a stable Panama. It is in the United States’ national interest to collaborate with The Panama Canal Authority (ACP) to fix the canal’s operational problems in the short term. However, in the long term, greenhouse gas emission reductions are the key to Panamanian stability.
This year, a brutal El Niño brought about a drought in Central America, causing serious slowdowns on both sides of the Panama Canal. The ACP, the independent organization that governs the canal’s operations, warns that such occurrences may become increasingly regular as global temperatures rise. Because the Panama Canal channels into a lake 85 feet above sea level, every ship that passes through the canal displaces up to 120 million gallons of fresh water into the Atlantic and Pacific Oceans. Ordinarily, annual rainfall into Lake Gatun is enough to make up for this discrepancy. Over the past decade, however, climate change has meant that the water level in the lake has been anything but stable.
In 2019, a severe drought saw the water levels in Lake Gatun fall to their lowest in the canal’s century-long history, significantly impacting operations. This past August, ACP imposed 10-month-long traffic restrictions to conserve water in light of another extreme drought in the region. The rainfall this year is 23.6% below average levels over the past 73 years. Ships on either side of the canal must wait, in some instances, for more than 20 days before they are allowed to cross.
Outside of Panama, the United States is the second-largest stakeholder in the canal. Roughly 73% of all tonnage that makes its way through the canal every year either originates from or heads to the United States. While the Nimitz-class and Ford-class aircraft carriers that are the centerpieces of the U.S. Navy are too wide to navigate the locks, American destroyers and submarines navigate the canal regularly. And in spite of longstanding concerns about the canal’s defensibility, it would be vital during a Pacific conflict to ship oil from the Gulf of Mexico to Pacific allies like Japan.
If the patterns of the last decade continue to hold, the cost of the canal’s inefficiency will impact a wide range of sectors across the U.S. economy, from manufacturing, agriculture, energy, and finance. This, in turn, poses further security risks. The Suez Canal’s six-day blockage due to a stuck ship in 2021 captured international attention and held up an estimated $9 billion per day in global trade. While the Panama Canal is not blocked in the same dramatic way, continual backlogs of ships will wear on the worldwide supply chain and impose follow-on costs that will significantly impact the United States. The COVID-19 pandemic exposed the vulnerability of global supply chains, even those directly tied to maintaining U.S. national security assets. The Department of Defense is keenly aware of this issue. The 2022 National Defense Strategy paid recurring mention to supply chain issues directly impacting U.S. military readiness.
It is firmly within the United States’ interest to keep the canal open and running smoothly. The easiest way to do this in the short term would be to connect additional Panamanian water sources to the canal. This massive engineering proposition is the option that ACP itself appears to be moving towards. The Canal Authority announced a preliminary $2 billion plan of concept to connect additional freshwater sources into the canal, contracting with the U.S. Army Corps of Engineers to define the scope of work for the project.
But the ACP’s last foray into multi-billion dollar contracting went less than smoothly. From 2009 to 2016, a project to add a third set of locks to the canal to accommodate larger ships ran into budgetary headaches, work stoppages, allegations of mismanagement, and nearly two years’ worth of delays. The United States should rightfully be concerned about ACP’s ability to manage another massive construction endeavor.
Ultimately, however, this short-term solution should not distract us from our longer-term goal: the reduction in greenhouse gas emissions both at home and globally, an enormous political and diplomatic proposition that the United States has continually paid lip service to. This course of action would provide numerous positive “knock on” effects over time. While the temperature increases that cause unpredictable weather are irreversible, any measures to stop future increases will have outsized impacts.
Panama, in particular, because of its unique geographic position, will be especially destabilized by climate change. The World Bank estimates that 17 million refugees from Latin America will migrate from their home countries over the next century. The destabilizing effects of droughts and changing weather patterns will force many northward to Mexico and the United States, in what researchers are already terming the largest migration event in human history. In the first half of 2023 alone, a quarter million South American migrants crossed the treacherous jungle into Panama. The situation has overwhelmed the country’s healthcare sector and will only worsen if current trends continue.
Considering that a stable Panama is key to American trade and military readiness, it is in the United States’ interest to take an active role in connecting new water sources to Lake Gatun and reducing its carbon emissions over the long term. The latter course of action would have far-reaching effects beyond Panama, and the United States would see the rewards of such a mitigation strategy for generations to come.