Melting Ice Caps and the Economic Impact of Opening the Northern Sea Route
A consequence of melting Arctic ice caps is the commercial viability of the Northern Sea Route, connecting North-East Asia with North-Western Europe. This will represent a sizeable reduction in shipping distances and a decrease in the average transportation days by around one-third compared to the c...
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ftrepec:oai:RePEc:cpb:discus:307 2024-04-14T08:06:40+00:00 Melting Ice Caps and the Economic Impact of Opening the Northern Sea Route Hugo Rojas-Romagosa Eddy Bekkers Joseph F. Francois https://www.cpb.nl/sites/default/files/publicaties/download/cpb-discussion-paper-307-melting-ice-caps-and-economic-impact-opening-northern-sea-route.pdf unknown https://www.cpb.nl/sites/default/files/publicaties/download/cpb-discussion-paper-307-melting-ice-caps-and-economic-impact-opening-northern-sea-route.pdf preprint ftrepec 2024-03-19T10:26:34Z A consequence of melting Arctic ice caps is the commercial viability of the Northern Sea Route, connecting North-East Asia with North-Western Europe. This will represent a sizeable reduction in shipping distances and a decrease in the average transportation days by around one-third compared to the currently used Southern Sea Route. We examine the economic impact of the opening of the Northern Sea Route in a multi-sector Eaton and Kortum model with intermediate linkages. This includes a remarkable shift of bilateral trade flows between Asia and Europe, diversion of trade within Europe, heavy shipping traffic in the Arctic, and a substantial drop in traffic through Suez. These global trade changes are reflected in real income and welfare effects for the countries involved. The estimated redirection of trade has also major geopolitical implications: the reorganisation of global supply chains within Europe and between Europe and Asia, and the highlighted political interest and environmental pressure on the Arctic. Report Arctic Northern Sea Route RePEc (Research Papers in Economics) Arctic |
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Open Polar |
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RePEc (Research Papers in Economics) |
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description |
A consequence of melting Arctic ice caps is the commercial viability of the Northern Sea Route, connecting North-East Asia with North-Western Europe. This will represent a sizeable reduction in shipping distances and a decrease in the average transportation days by around one-third compared to the currently used Southern Sea Route. We examine the economic impact of the opening of the Northern Sea Route in a multi-sector Eaton and Kortum model with intermediate linkages. This includes a remarkable shift of bilateral trade flows between Asia and Europe, diversion of trade within Europe, heavy shipping traffic in the Arctic, and a substantial drop in traffic through Suez. These global trade changes are reflected in real income and welfare effects for the countries involved. The estimated redirection of trade has also major geopolitical implications: the reorganisation of global supply chains within Europe and between Europe and Asia, and the highlighted political interest and environmental pressure on the Arctic. |
format |
Report |
author |
Hugo Rojas-Romagosa Eddy Bekkers Joseph F. Francois |
spellingShingle |
Hugo Rojas-Romagosa Eddy Bekkers Joseph F. Francois Melting Ice Caps and the Economic Impact of Opening the Northern Sea Route |
author_facet |
Hugo Rojas-Romagosa Eddy Bekkers Joseph F. Francois |
author_sort |
Hugo Rojas-Romagosa |
title |
Melting Ice Caps and the Economic Impact of Opening the Northern Sea Route |
title_short |
Melting Ice Caps and the Economic Impact of Opening the Northern Sea Route |
title_full |
Melting Ice Caps and the Economic Impact of Opening the Northern Sea Route |
title_fullStr |
Melting Ice Caps and the Economic Impact of Opening the Northern Sea Route |
title_full_unstemmed |
Melting Ice Caps and the Economic Impact of Opening the Northern Sea Route |
title_sort |
melting ice caps and the economic impact of opening the northern sea route |
url |
https://www.cpb.nl/sites/default/files/publicaties/download/cpb-discussion-paper-307-melting-ice-caps-and-economic-impact-opening-northern-sea-route.pdf |
geographic |
Arctic |
geographic_facet |
Arctic |
genre |
Arctic Northern Sea Route |
genre_facet |
Arctic Northern Sea Route |
op_relation |
https://www.cpb.nl/sites/default/files/publicaties/download/cpb-discussion-paper-307-melting-ice-caps-and-economic-impact-opening-northern-sea-route.pdf |
_version_ |
1796303762447400960 |