Melting Ice Caps and the Economic Impact of Opening the Northern Sea Route | Zendy

Bekkers Eddy | Zendy; Francois Joseph F. | Zendy; RojasRomagosa Hugo | Zendy

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Melting Ice Caps and the Economic Impact of Opening the Northern Sea Route

Author(s) -

Bekkers Eddy,

Francois Joseph F.,

RojasRomagosa Hugo

Publication year - 2018

Publication title -

the economic journal

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 4.683

H-Index - 160

eISSN - 1468-0297

pISSN - 0013-0133

DOI - 10.1111/ecoj.12460

Subject(s) - arctic , the arctic , ice caps , geography , arctic ice pack , threatened species , sea ice , environmental science , international trade , oceanography , business , physical geography , geology , meteorology , ecology , habitat , glacier , biology

One consequence of melting Arctic ice caps is the commercial viability of the Northern Sea Route, connecting East Asia with Europe. This represents a sizeable reduction in shipping distances and average transportation days compared to the conventional Southern Sea Route. We examine the economic impact of opening this route in a multi‐sector Eaton–Kortum model with intermediate linkages. We find remarkable shifts in trade flows between Asia and Europe, diversion of trade within Europe, heavy shipping traffic in the Arctic and a substantial drop in Suez traffic. Projected shifts in trade also imply substantial pressure on an already threatened Arctic ecosystem.

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