Panamnacanalcasestudy Hyunju

Panama Canal Case Study
Hyunju Jeong, John C. Crittenden, and Ming Xu

Messner Meeting on Dec 16, 2009
Geography
Panama Canal." 27 February 2008. HowStuffWorks.com.

<http://history.howstuffworks.com/american-history/panama-canal.htm> 19
December 2009.
The Panama Canal created a shortcut from the Atlantic Ocean to the Pacific(1).
Outline
 Comprehensive Analysis in terms of

infrastructure, physical environment, and
socio-economic environment
 Initial Panama Canal Development (1914 )
 Panama Canal Expansion (2014)
SOURCE:
Panama Canal Development
Canal development for transportation and its
positive and negative impacts on physical and
socio-economic environment
Economy Vs. Transportation(2)
 Background of Panama Canal

Economic reason
Ex. just in time to make a fortune carrying gold-
seekers on their way to California
 To shorten the traveling distance
 Cost
Construction + Implicit interest cost + Canal defense
= $921.7 million
The project’s scale in 2006 scale = $119.4 billion
SOURCE:
Transportation Vs. Economy(2)
 Economic Savings
Basic Global Social Savings Estimates
(by route, in millions of 1925 dollars)
Transportation Vs. Environment (3)
 Big watershed for a small country

 Water for transportation, hydropower, and
human and industrial use
 Soil Erosion
 Microclimatic Change
 Water saving for navigation  Low Evapo-
transpiration land use
Ex. Forest, Water conserving crops
Environment Vs. Economy(3)
 Microclimate change of east side

Farmland in arid area  Industry in cities
 Water scarcity :
 irrigation of expensive tropical products  Cattle
ranching and commercial agriculture
 Deficient water amount does not support the canal
functions well  economic benefits decrease
Panama Canal Expansion ( ~ 2014)
Impacts on physical, biological, and socio-

economic environments
Roles and Construction (4)
 Economic Role
Nearly 7 % of the Gross Domestic Product (GDP) in the
Panamanian economy
120,000 direct and indirect jobs
 Efficient Construction Option
 Construction of two lock complexes—one on the Atlantic
side and another on the Pacific side—each with three
chambers, which include three water-saving basins
 Excavation of new access channels to the new locks and
the widening of existing navigational channels
 Deepening of the navigation channels and the elevation
of Gatun Lake’s maximum operating level.
SOURCE: Panama Canal Authority (2006) Environmental Impact Report

Goal (4)
 To maintain the competitiveness and value of the Canal

route by generating higher revenues and benefits for the
Republic of Panama over the long range in a sustainable
manner.
 To Increase the capacity to meet the growing demand for
transits with adequate levels for each segment.
 To allow the transit of ships larger than Panama, in order
to increase Canal productivity
 To add room in the operating capacity to perform
maintenance work that requires prolonged lane outages in
the current Canal.

Impacts on Physical Environment (5)
 Microclimate change
due to changes in land use : loss of vegetative cover and biomass
 Loss of Potential Carbon Capture
due to changes in land use : forest, brush, shrubs, grassland and
pasture  paved surfaces, water surfaces(navigation channels,
locks, and water saving basins), rock or exposed soil surfaces
(slopes)
 Deterioration of Air Quality
construction activity and increased ship traffic
 Undermining (Cave-ins)
potential alterations of the local geological and/or hydrogeological
features of the area due to excavation and backfilling  landslides
and/or soil settlement
 Increase in Landslides Risk and soil
Impacts on Biological Environment (6)
 Loss of Vegetative Cover

 Loss of Forestry Potential
 Loss of Land Fauna Habitat
 Direct Impact on Fauna
 Disturbance to Wildlife
 Increased Wildlife Road Kill Risk
 Increased Poaching
 Alteration of Aquatic Resources in Rivers and Creeks
 Alteration of Aquatic Resources of Gatun Lake
 Alteration of Aquatic Resources in Miraflores Lake
 Alteration of Marine Coastal Ecosystems
 Impact on Protected Area
Impacts on Socio-Economic Environment(7)
 Stimulus to the National Economy

 Investment (US 2007, $5.25 billion)  Construction supply
sector, Salary expense, Demand for household goods,
Service to the staff
 Panama total export : 9.5% more
 Fiscal Revenues : 31.8 % higher
 Increase in Panama National Treasury Revenues
 During the first 11 yrs : US (2007) $8.5 billion more
 Job Generation
 6,500 ~ 7,000 new direct jobs
 28,500 ~ 33,000 indirect jobs
 Additional requirement for the operation of new locks and
routine maintenance activities
Impacts on Socio-Economic Environment
 Increase of population and migration flows

 Due to the Project and the growth of the economy
 Change in land use
 Due to the Project and the demand for new space in the
Metropolitan region
 Impact on public infrastructure
 Utility infrastructure including potable water distribution
pipes and sewer collection and treatment system
 High voltage transmission towers and lines from power plants
 Vehicle traffic due to an increased demand for
transportation
Impacts on Socio-Economic Environment
 Property Revaluation
 Mobility and utility provided by the infrastructure and
the landscape changes with views of the new locks and
transit activities
 Work-related illness or accidents

 Crime rates : employment rate and quality of life
 Waste generation : more construction wastes
more people, more wastes
 Tourism flows
SOURCE:
Management Plan
for Sustainable Development(8)
 Mitigation plan - air, water, soil, biological, waste

 Monitoring and Follow-up Plan
 Citizen Participation Plan
 Risk Prevention Plan - risks, reponsibilities, regulation
 Environmental Education Plan
 Contractor Contingency Plan
emergency response measures (fire, flood, earthquake,
accidents)
 Post-operations Environment
after the completion of all activities and closure of the
sites  the reestablishment of natural biological
communities
Economic Analysis
for Sustainable Development(9)
 Monetary valuation of environmental impact

and social externalities
 Net Present Value (NPV) of the project
investment
 Compare the above values
 The project is considered socially and

environmentally feasible, provided that the
prevention, mitigation, monitoring, and
compensation measures are performed.
Conclusion
 For sustainable development for any sector, the

comprehensive interrelations should be understood.
 For sustainable development for any sector, the

conflicts with environment should be considered.
 e.g., Green landscaping is a comprehensive

alternative satisfying infrastructure requirement,
positive socio-economic impacts and less
environmental impact
Bibliography
(1) Panama Canal." 27 February 2008. HowStuffWorks.com.

<http://history.howstuffworks.com/american-history/panama-canal.htm> 19 December
2009.
(2) Mauer et al. (2006) What Roosevelt Took: The Economic Impact of the Panama Canal,
1903 ~ 1937
(3) Carlos Vargas , Integrated management of Panama Canal Watershed, Summer Institute
2001 Research Mini-Project
(4) Panama Canal Authority (2007) Canal Expansion Program, Environmental impact study
(EIS), Chap 3 Project description
(EIS), Chap 4 Description of the physical environment
(EIS), Chap 5 Description of the biological environment
(EIS), Chap 6 Description of the socioeconomic environment
(EIS), Chap 8 Environmental management plan
(EIS), Chap 9 Final cost-benefit analysis

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Panama Canal Case Study

Hyunju Jeong, John C. Crittenden, and Ming Xu

Panama Canal." 27 February 2008. HowStuffWorks.com.

 Comprehensive Analysis in terms of

 Initial Panama Canal Development (1914 )

 Panama Canal Expansion (2014)

 Background of Panama Canal

 Big watershed for a small country

 Microclimate change of east side

Impacts on physical, biological, and socio-

SOURCE: Panama Canal Authority (2006) Environmental Impact Report

 To maintain the competitiveness and value of the Canal

SOURCE: Panama Canal Authority (2006) Environmental Impact Report

 Loss of Vegetative Cover

 Stimulus to the National Economy

 Increase of population and migration flows

 Work-related illness or accidents

 Mitigation plan - air, water, soil, biological, waste

 Monetary valuation of environmental impact

 The project is considered socially and

 For sustainable development for any sector, the

 For sustainable development for any sector, the

 e.g., Green landscaping is a comprehensive

(1) Panama Canal." 27 February 2008. HowStuffWorks.com.

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