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Sanctions or sea ice: Costs of closing the Northern Sea Route

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  • Goldstein, Michael A.
  • Lynch, Amanda H.
  • Li, Xueke
  • Norchi, Charles H.

Abstract

Either sea ice or recent sanctions on Russia could close or shorten the use of the Northern Sea Route (NSR). Using 16 climate realizations and shipping routes to estimate the value of an NSR transit, we find that closure costs could be as high as $3.3 billion, with possible overall losses as high as $10 billion. Ultimately, sanctions are as expensive as sea ice. The estimates used to produce these findings may be used by other researchers to assess possible future cost savings as climate change continues to affect global transportation.

Suggested Citation

  • Goldstein, Michael A. & Lynch, Amanda H. & Li, Xueke & Norchi, Charles H., 2022. "Sanctions or sea ice: Costs of closing the Northern Sea Route," Finance Research Letters, Elsevier, vol. 50(C).
    • Handle: RePEc:eee:finlet:v:50:y:2022:i:c:s1544612322004536
    DOI: 10.1016/j.frl.2022.103257
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    1. Xueke Li & Amanda H. Lynch, 2023. "New insights into projected Arctic sea road: operational risks, economic values, and policy implications," Climatic Change, Springer, vol. 176(4), pages 1-16, April.

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