The Panama Canal has a history that spans hundreds of years and it occupies a critical place in the modern world. It is a superb example of a great building feat (DuTemple, 2003). A number of environmental impacts of Panama Canal have been addressed. They include the potential of increased dredging of the inland waterways, reduced use of winter road maintenance substances as well as the impacts that the shipping could have on the water. For instance, the dredging of waterways in response to the falling water levels has unintended and harmful ecological impacts. In a number of areas, the dredged material is highly contaminated, so dredging stirs up the once buried toxins and creates challenges to spoil dispersal (Bell, 2010). Increased shipping leads to the negative environmental impacts especially through oil spills. The oil that is spilled in water leads to death of the water organisms. On the other hand, reduced water maintenance is a positive environmental impact of the Panama Canal, particularly in relation to the milder winter weather. For example, reduced salt loadings in water ways, due to reduced salt use during winter periods positively impact the environment (Bell, 2010).
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The importance of the Panama Canal watershed lies in its role as a natural system that provides constant supply of water to the surrounding residents. Unfortunately, the building of Panama Canal has led to increased deforestation which in turn threatens the watershed. Also, this deforestation has led to erosion and building of sediments at the Panama Canal (Ashton, Hara & Hauff, 1999). Setting aside protected forest areas at the Canal is considered to be a good strategy of combating deforestation as well as preserving the Canal. In turn, the protected areas offer preservation of biodiversity, wildlife habitat and provision for ensuring high water quality which have been the environmental concerns of the government in Panama.