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

2016/12/17 by Eddy Bekkers, Joseph François, Hugo Rojas‐Romagosa · 212 citations
Environmental Science · Health Professions · Social Sciences · #Arctic #Arctic and Russian Policy Studies #Arctic ice pack #Business #Ecology #Environmental science #Geography #Geology #Habitat #Ice caps #Indigenous Studies and Ecology #International trade #Meteorology #Oceanography #Physical geography #Polar Research and Ecology #Sea ice #The arctic #Threatened species

paper · pdf · doi:10.1111/ecoj.12460

published in The Economic Journal 128(610), 1095-1127 (Oxford University Press)

openalex publication_date 2016/12/17 · openalex created_date 2025/10/10 · openalex updated_date 2026/08/01

Abstract

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.

Citations

• Large Decadal Decline of the Arctic Multiyear Ice Cover
• IPCC climate models do not capture Arctic sea ice drift acceleration: Consequences in terms of projected sea ice thinning and decline
• The Log of Gravity
• Technology, Geography, and Trade
• Arctic sea-ice change: a grand challenge of climate science
• A Reconciled Estimate of Ice-Sheet Mass Balance
• Estimates of the Trade and Welfare Effects of NAFTA

Cited by

• Climate change in the Arctic [wikipedia]