In December 2014, Nicaraguan President Daniel Ortega and Chinese entrepreneur Wang Jing negotiated a contract to begin the construction of a state-of-the-art canal that would have the capacity to accommodate a new generation of oil tankers and mega-size container ships that are too large to cross the Panama Canal [in its current state].

The proposed canal will cross Lake Nicaragua, the second largest lake in Latin America to connect the Caribbean Sea and the Atlantic with the Pacific Ocean. At 173 miles in length, the canal will be about three times longer than the Panama Canal.

The projected total cost is set at $50 billion but is expected to increase. The canal plan is projected to increase regional transshipment, foreign investment, and maritime initiatives in the Caribbean. Once completed, estimations suggest that 5% of the world’s maritime trade will pass through the Nicaragua canal alone.

Geopolitically, the project is a venture that could point to a diplomatic conflict between the United States and China over Chinese ambitions intended to increase its investment and economic influence in Latin America. Albeit the Chinese government disputes having any direct public engagement with the project, China is indeed interested and will likely take on a significant role as the project develops.

While the canal is anticipated to boost commercial activity and revenue in the region significantly, the project carries substantial environmental risks. Nicaraguans, local and international scientists alike, believe the canal could lead to environmental disaster, threatening many surrounding ecosystems.

Researchers argue that Lake Nicaragua, which supplies an estimated 200,000 citizens with drinking water, runs a significant risk of becoming contaminated by dredging and then later by shipment traffic. The new canal is likely to introduce salt water and invasive species to the freshwater lake, and threaten regional ecosystems. Changes in water transparency, quality and temperature may also cause the fragile ecosystem to collapse. However, for most Nicaraguans, these environmental concerns run a distant second to the promised economic stimulus that the canal would deliver.

Furthermore, scientists have articulated their concerns that the environment itself could have a significant impact on the canal’s infrastructure. Nicaragua is home to regular seismic and volcanic activity, and would, therefore, be unpredictably expensive to maintain and repair. Many also question whether the economic sensibility of the canal project, given that the Panama Canal has been undergoing a $5.25 billion expansion that would expand on its accommodation abilities, posing significant competition to the Nicaraguan venture.