Panama vs. US: Whoever runs the Panama Canal needs to find more water
| Lim贸n de Chagres, Panama
Water was never something Genaro Acevedo Jim茅nez had to worry about in this verdant slice of rural Panama.
But now, water has become his biggest problem.
His village sits near the Panama Canal, on the site of a proposed dam and reservoir that authorities say are necessary to keep one of the world鈥檚 most critical trade routes passable.
Why We Wrote This
The Panama Canal was an engineering marvel when it was completed in 1914. But a modern effort to save the critical waterway amid water shortages could exact a high human toll.
鈥淲e can鈥檛 live underwater,鈥� Mr. Acevedo says, sweeping his arms out toward the lush green hills and terra-cotta-red soil that he鈥檚 farmed for the past 43 years. 鈥淭his is all we have.鈥�
The Panama Canal, which connects the Pacific and Atlantic oceans, sees 5% of world trade 鈥� and 40% of all U.S. container traffic 鈥� pass through it. It鈥檚 so coveted that the U.S. has threatened to take it back, provoking a geopolitical war of words this year over ownership. So, following two historic droughts in less than a decade and growing population demands that have put the canal under pressure, the Panama Canal Board of Directors in March approved the R铆o Indio Dam that could wipe Lim贸n de Chagres entirely off the map.
Mr. Acevedo鈥檚 concerns are more immediate than most, but he is not the only person to question the value of a large dam like this one. Across the world, many experts argue that most dams are simply not worth their social or environmental costs.
Panama Canal Authority,聽Map data from聽
The Panama Canal is ground zero for the debate over where the right balance lies.
鈥淚n Panama there is a clear awareness that the canal is a national resource,鈥� says Olga de Obald铆a, executive director of the Foundation for the Development of Citizen Liberty, a Panamanian nongovernmental organization. What isn鈥檛 clear to the population, she says, is how much environmental or social damage is worth it to keep its water flowing.
Changing climate
It takes an estimated 50 million gallons of freshwater to move vessels through the Panama Canal鈥檚 locks system, which functions like a staircase. Boats rise through a set of locks, move across a lake, and then descend another set of locks as they pass between two oceans. That water has historically come from Gatun Lake, a reservoir whose construction in the early 20th century displaced several communities.
The Panama Canal Authority (ACP) is responsible for the management and conservation of water in the Panama Canal watershed, which spans roughly 3,400 square miles, or 6.5% of Panamanian territory. It also provides drinking water for some 55% of the population.
In 2005, when the canal was preparing for an expansion in width and depth, including a new traffic lane to accommodate larger vessels, the ACP created a master plan and concluded they could manage water challenges with solutions that didn鈥檛 involve community displacement. That meant steps like recycling water back into Gatun Lake to better withstand dry seasons.
But 10 years into what the ACP considered a 20-year plan, El Ni帽o, a climate pattern known for warming the ocean鈥檚 surface, contributed to a historic drought. Then, in 2023, another severe drought created such low water levels that traffic through the Panama Canal fell by roughly 30%.
In 2024, a Panama聽Supreme Court decision paved the way for the ACP to alter the path of the water of the R铆o Indio Valley 鈥渇or the sustainability of the canal and for the [national] population鈥檚 water access,鈥� says John Langman, vice president of the Water Projects Office at the ACP.
The ACP decided on a dam, going against a global trend. Just a few years ago, environmentalists started asking if the world had hit 鈥減eak dam鈥� 鈥� as the number of dams constructed annually fell from about 1,500 in the 1970s to roughly 50 a year by 2020. Many saw the decline as an explicit recognition of the social, environmental, and economic toll of these megaprojects.
鈥淒ams have historically been designed and built based on the historic record of [river] flows and rainfall,鈥� says Josh Klemm, co-director at International Rivers, a U.S.-based nonprofit. 鈥淏ut climate change has completely upended that.鈥� And yet several large dam projects around the world have been funded in recent months. This one in Panama, he says, could end up creating high social costs with potentially low returns on water given a changing climate.
Disrupting lives
Lim贸n de Chagres is home to almost 2,300 residents who depend on the R铆o Indio for fishing, bathing, and transportation. The town had no paved roads until three years ago. Most here board boats to get to the nearest hospital or shops. Residents are proud of what they鈥檝e built on their own, like the community鈥檚 tiny cement church with a tin roof.
But they feel little connection to the Panama Canal, with its closest visitor center about 40 miles away. 鈥淚鈥檓 not proud of the canal,鈥� says farmer Claudio Dominguez, who arrived 42 years ago, raising four children here. 鈥淲hy feel pride about something that doesn鈥檛 benefit me?鈥� he asks, horses whinnying beside him.
The ACP maintains its compensation model meets modern standards. Mr. Langman says packages for each family will depend on where they want to go next, how much land they own, and other variables determined through a detailed census.
鈥淚nternational requirements for this project are much more demanding than in 1935,鈥� he says. That鈥檚 when the last displacement due to a canal reservoir project, Alajuela Lake, took place in Panama.
But, 鈥淭here have been lessons learned from more recent projects鈥� nationally and internationally, says Mr. Langman. His office has studied the effects of Panamanian hydroelectric dams, like one built by the government in 2011 that flooded towns, and the ACP has reached out to community defense groups to better understand what residents in places like Lim贸n de Chagres may need in this delicate process.
Despite the effort, there are still high levels of mistrust. Many fear being displaced to cities. 鈥淲e鈥檝e been raised in the countryside,鈥� says Elizabeth Rodr铆guez, whose two young sons hide behind her legs and play on the grass in front of the church on a blistering morning in March. 鈥淭o change habitats would be difficult.鈥�
鈥淭hey [the ACP] haven鈥檛 been clear鈥� on what comes next, she maintains. Many community members are refusing to meet with ACP representatives, blocking them from town or turning them away from their property. In neighboring Tres Hermanas, ACP representatives were chased out in late April.
Some had been displaced by dams by the turn of this century. Although there have been great strides in how people are moved or compensated for dam projects, Mr. Klemm says 鈥渋mpoverishment is the rule, rather than the exception.鈥�
That鈥檚 what scares Mr. Acevedo, the farmer, most. 鈥淚鈥檓 finishing my time on Earth,鈥� he says, but to take this land and way of life away from local youth is to 鈥渒ill them.鈥�
He calls Lim贸n de Chagres a gift from his ancestors. And that鈥檚 what makes wrapping his head around the dam situation so difficult: For the Panama Canal to have water, he has to give up the life he鈥檚 built and the community he cherishes.
鈥淗ow can it be?鈥� he asks.
