• Rainforests cover 65% of Panama, but between 2012 to 2019 the country lost around 2% of its forest per year.
  • Officials are now taking steps to combat forest losses.
  • Logging permits granted by the environment ministry have been suspended, and satellite and drone surveillance has increased.
  • Panama aims to reforest 1 million hectares by 2050.
  • Businesses can now get tax breaks for solar and wind power equipment.
  • Panama also plans to shift to electric buses and government cars, while cutting the use of petrol cars by at least 30% over the next decade.

Deforestation rates in Panama are set to show a decline as the Central American nation ramps up its efforts to stop the illegal logging of forests largely driven by the expansion of agriculture, environment minister Milciades Concepcion said.

Panama boasts one of the highest levels of forest cover in Central America, with rainforests on about 65% of its land, as well as mangrove and cloud forest ecosystems.

But expansion of farming and cattle ranching, along with "abuse" of logging permits, threaten Panama's forest and have led to rising deforestation rates in recent years, Concepcion said in a video interview.

Panama lost nearly 2% of its forest cover from 2012 to 2019 - the equivalent of about 8,000 hectares (19,768 acres) a year - according to government figures.

"There's a cultural aspect to this," Concepcion told the Thomson Reuters Foundation. "Many people in rural areas live off this (logging) and it's not easy from one day to the next to get deforestation down to zero."

To that end, logging permits granted by the environment ministry have been suspended for the past year and a half, and monitoring by police and border patrols and the use of drones and satellite imagery have increased, said the agronomist.

"Citizens are also increasingly reporting environmental crimes," he said. Next year's deforestation rates will "no doubt" show a decline, he added, without giving more detail.

As part of a 2014 pact between the government and business leaders, as well as its national climate action plan, Panama aims to reforest 1 million hectares by 2050, including planting trees on degraded land.

Measures have also been stepped up to make it far harder for businesses to receive state bank loans if proven to have been involved in the "unlawful use" of land and forests, or if they lack proper permits for forest areas, Concepcion said.

Green energy

Panama also plans to cut the use of petrol cars by at least 30% over the next decade by increasing the electric-vehicle offer on the market, phasing out fossil fuel-powered government cars by next year and shifting to electric buses, he said.

The transport sector is a key driver of carbon emissions, accounting for about 40% of the total in a nation of about 4 million people, Concepcion said.

About 70% of Panama's electricity is generated from hydropower and less than 10% of energy used by the private sector comes from wind and solar, he said.

Solar and wind power were virtually non-existent in Panama 15 years ago, he noted, adding that the country aims to generate up to 95% of its electricity needs from renewable energy by 2050 with hydro accounting for a large share.

Businesses can now get tax breaks for installation and equipment costs for solar and wind power - and it is hoped more financial incentives will be offered to boost their share of the energy mix, Concepcion said.

Shipping woes

In recent years, Panama has experienced the impacts of climate change, from flooding and landslides caused by torrential rains to hurricanes that killed 20 people last year.

Erratic rainfall is also affecting its major economic driver and source of revenue - the Panama Canal - one of the world's busiest shipping routes that handles about 5% of world trade.

An aerial view of the new Panama Canal expansion project on the Atlantic side of the Panama Canal during an organized media tour by Italy's Salini Impregilo, one of the main sub contractors of the Panama Canal Expansion project, on the outskirt of Colon City, Panama May 11, 2016.  REUTERS/Carlos Jasso - S1BETDNJVDAA
An aerial view of the new Panama Canal expansion project on the Atlantic side of the Panama.
Image: REUTERS/Carlos Jasso - S1BETDNJVDAA

Prolonged and more severe droughts have impacted the canal's watershed and negatively affected the supply of water from Gatun Lake, a major part of the waterway.

The canal authority has been forced to impose temporary maximum depth limits on ships seeking to cross the waterway.

"The effects of climate change are also seen in the fact that sometimes it's necessary to restrict the draft on ships due to little rainfall at certain times of the year," Concepcion said.

Last year, the canal had to cut its daily slot reservations due to drought, and impose a "freshwater" charge on ships.

"Climate change 10, 15 years ago was seen as a distant threat. Now it's a close one," Concepcion said.