More than five per cent of global trade passes through the Panama Canal. About 2.6 billion cubic metres of fresh water is required each year to operate the six locks that raise ships 25.9 metres above sea level and back down again. A staggering 200,000 cubic metres of fresh water is used every time the locks are opened.

Floods and high water levels in the watershed put the locks and dams at risk; drought and low water levels reduce ship passage. So too much water, or too little, impacts global commerce. In December 2010, flooding closed the Panama Canal for 19 hours – the first time flooding had shut the canal since it opened in 1914. The canal also provides drinking water to 1.5 million people in Panama City, so it is vital to mitigate risk and assure the flow of water.

The Panama Canal Watershed Experiment has the potential to be the tropical-hydrology project of the decade

Dr Sampurno Bruijnzeel,

Professor of Land Use Hydrology, Vrije Universiteit, Amsterdam

Ecologists and hydrologists from the Smithsonian measured and tracked the way water flows seasonally and the role forests of different types play in regulating the flows. The project, funded by the HSBC Climate Partnership, has reforested more than 100 hectares of degraded land on the banks of the Panama Canal with different native and exotic tree species, including teak, thus establishing a very large-scale experiment that includes pastureland and plantations besides forests.

Smithsonian scientists are monitoring water regulation and storage, as well as carbon capture, across the different land-use experiments.


The knowledge and models derived from this project will aid land-use decisions in Panama, the Caribbean basin and much of the seasonal tropics. The data will help secure the long-term viability of the canal and ensure the continuing passage of trade through its waters.

The fees levied on ships using the canal means a global financial value can be assigned to the fresh water vital to its operations. HSBC-sponsored science in Panama aims to quantify the financial value of the full range of 'environmental services' provided by the forests along the canal's banks. In 2014, when new and much larger locks are opened on the 100th anniversary of the Panama Canal, this will help to focus global attention on the importance of the world's forests and woodlands to water supplies.

About the HSBC Climate Partnership

The HSBC Climate Partnership, which ended in December 2011, was a five-year environmental programme between HSBC, The Climate Group, Earthwatch Institute, the Smithsonian Tropical Research Institute and WWF. The programme helped reduce the impact of climate change on people, forests, freshwater and cities and accelerate the adoption of low-carbon policies.