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The economic impact of Arctic melt
The world is about to get a lot more real estate and also some new water lanes:
The shipping shortcuts of the Northern Sea Route (over Eurasia) and the Northwest Passage (over North America) would cut existing oceanic transit times by days, saving shipping companies -- not to mention navies and smugglers -- thousands of miles in travel. The Northern Sea Route would reduce the sailing distance between Rotterdam and Yokohama from 11,200 nautical miles -- via the current route, through the Suez Canal -- to only 6,500 nautical miles, a savings of more than 40 percent. Likewise, the Northwest Passage would trim a voyage from Seattle to Rotterdam by 2,000 nautical miles, making it nearly 25 percent shorter than the current route, via the Panama Canal. Taking into account canal fees, fuel costs, and other variables that determine freight rates, these shortcuts could cut the cost of a single voyage by a large container ship by as much as 20 percent -- from approximately $17.5 million to $14 million -- saving the shipping industry billions of dollars a year. The savings would be even greater for the megaships that are unable to fit through the Panama and Suez Canals and so currently sail around the Cape of Good Hope and Cape Horn.
Here is the full article, which is interesting throughout; if you read only five magazine-like articles this year, this should be one of them. How about this bit?
Between 1958 and 1992, Russia dumped 18 nuclear reactors into the Arctic Ocean, several of them still fully loaded with nuclear fuel.
I might add that, historically, struggles over new territory tend to bring conflict. The creation of new Arctic "territory" is one of the most important issues in the world right now.
Posted by Tyler Cowen on March 7, 2008 at 08:01 AM in Current Affairs | Permalink
Comments
Reportedly the Russians have been planting flags on the floor of parts of the Arctic Ocean and claiming it as their territory.
Posted by: spencer at Mar 7, 2008 10:04:48 AM
Is there a way to short these guys?
We're currently a nudge above average in global sea ice. See here.
Posted by: Jody at Mar 7, 2008 10:12:44 AM
It's only march, how do you know one of the top 5 articles of the year?
Posted by: stuart at Mar 7, 2008 10:16:42 AM
But will Rotterdam still be there when the ships arrive? Or will they need to go an extra distance to drop off their cargo at Eindhoven or maybe Dusseldorf?
Posted by: M. Hodak at Mar 7, 2008 10:39:43 AM
The savings would be even greater for the megaships that are unable to fit through the Panama and Suez Canals and so currently sail around the Cape of Good Hope and Cape Horn.
No ships are too large to fit through the Suez Canal. Some of the very largest supertankers can't quite make it when fully loaded, but they work around that issue by offloading some of their oil into a pipeline when they enter the canal and picking up an equivalent amount from the pipeline at the other end.
Posted by: Peter at Mar 7, 2008 11:20:17 AM
It is disappointing, though not surprising, that the Bush administration has dropped the ball entirely on this issue.
Posted by: mpowell at Mar 7, 2008 11:52:52 AM
"The creation of new Arctic "territory" is one of the most important issues in the world right now." I disagree.
The most important issue will be how the melting of ice will increase sea level and wipe out parts of Africa, Asia and Latin America. If you saw what happened in Gaza a few weeks ago--people breaking down the border and move into Egypt, multiply that by several fold.
This will not be considered important issue because it does not affect "us," only the remote "them."
Posted by: Asif Dowla at Mar 7, 2008 11:54:48 AM
"The creation of new Arctic "territory" is one of the most important issues in the world right now." I disagree.
The most important issue will be how the melting of ice will increase sea level and wipe out parts of Africa, Asia and Latin America. If you saw what happened in Gaza a few weeks ago--people breaking down the border and move into Egypt, multiply that by several fold.
This will not be considered important issue because it does not affect "us," only the remote "them."
Posted by: Asif Dowla at Mar 7, 2008 11:55:28 AM
So what do we louse as the water goes up. This is only the upside. There is a clear down side as pointed out above. What if Rotterdam, is no longer functional? (water goes up, dikes fail) Seems like what the BlackSwan's that might come up should be looked VERY hard here.
just my $.02.
Posted by: Eric at Mar 7, 2008 12:09:49 PM
Tyler,
All your AGW links of late remind me of the slew of "NASDAQ 20,000" articles and books in the summer of 2000.
Given that the globe hasn't detectably warmed in the last decade, and that there are now lots of indications that we are entering a cooling phase, perhaps it is time for a smidgeon of AGW skepticism. . .
Posted by: Matthew at Mar 7, 2008 1:31:18 PM
You assume global warming will continue. The most accurate measure of global warming are satellite measurements, which indicate global temperatures have been constant for the last ten years or so, and may now be falling. Present ice levels are pretty much what they typically have been throughout the twentieth century.
The urban heat island effect is several degrees centigrade, which makes it impossible to get an accurate measure of global temperature from weather stations unless one carefully selects stations, and there are not enough known good stations. Sea surface measurements and satellite measurements provide a more accurate measure.
If you look at the graph of ice coverage one way, there is a trend to lesser ice levels. Look at it another way, no obvious trend. We had one summer of much reduced ice levels - an unusual, but far from unprecedented summer. And now, back to normal levels of ice.
Posted by: James A. Donald at Mar 7, 2008 2:21:32 PM
"No ships are too large to fit through the Suez Canal. Some of the very largest supertankers can't quite make it when fully loaded, but they work around that issue by offloading some of their oil into a pipeline when they enter the canal and picking up an equivalent amount from the pipeline at the other end."
Actually my good friend in the Navy will be taking the long route to Japan this year as his boat won't be able to go through the canal. What is with all the AGW skepticism here? They haven't burnt all you guys at the stake yet for heresy?
Posted by: Jayson Virissimo at Mar 7, 2008 3:00:54 PM
What is with all the AGW skepticism here? They haven't burnt all you guys at the stake yet for heresy?
Their application for carbon credits was lost in the UN bureaucracy. It's burn skeptics at the stake or heat their homes this winter, but I'm sure they'll try again next year.
Posted by: 8 at Mar 7, 2008 3:12:07 PM
We do should prepare for Black Swans.
Posted by: aaron at Mar 7, 2008 3:54:10 PM
[oops. I'd apologize for the typo, but if I got in that habit I'd never get anything done.]
Anyway, you don't look at possible Black Swans. By definition, you can't. They are completely unexpected.
They also don't tend to follow the narratives we like to assign to them ;)
Posted by: aaron at Mar 7, 2008 3:59:01 PM
I do like this blog much. But the absolute certainty of:
The world is about to get a lot more real estate and also some new water lanes
does not behoove TC. As others have eloquently noted, the tiniest smidgen of healthy skepticism with regards to AGW is what is certainly warranted.
Posted by: Varangy at Mar 7, 2008 4:04:55 PM
My understanding is that TC does not put much stock into NNT's ideas.
Posted by: Varangy at Mar 7, 2008 4:09:25 PM
Some people seem to have their arctics and antarctics confused. The vast majority of arctic ice is sea ice. Floating on water.
Posted by: aaron at Mar 7, 2008 4:33:46 PM
mpowell: I think we can safely trust the Canadians with a shipping lane. It is a rather more predictable country than, say, Egypt.
Which is an interesting thought: If the worlds shipping lanes pass through, and oil comes from, Canada rather than the Middle East, will we finally be able to forget about the latter location?
Posted by: ad at Mar 7, 2008 5:26:54 PM
Skeptics, in the face of any evidence a person can always say 'you could still be wrong.' That is true. The question is how much we should bet on overwhelming scientific opinion being wrong, and whether we hedge at all.
Rather than having "the tiniest smidgen of healthy skepticism" you are in fact asking for it all. You are asking us to bet our future on not science, but on (often untutored) dissent.
Shouldn't we be able to ask you to go get your PHDs, and make your case with real science, for something that big?
Why is this always grumbling from the back-rows?
Posted by: odograph at Mar 7, 2008 5:35:01 PM
I suspect that the fee to cross the NW Passage (payable to Canada) will exceed the fee to cross the Panama Canal in 2030.
Posted by: Paul N at Mar 7, 2008 6:13:05 PM
Odograph,
I will bet you $100 that the average global temperature as measured by satellite will be lower for 2015-2017 than for 2005-2007. In addition, the loser has to create a video where he will smash a raw egg on the side of his cheek and post it to youtube, admitting that he has "egg on his face".
Are you up for the bet?
Posted by: Matthew at Mar 7, 2008 7:06:16 PM
Asif Dowla: "The creation of new Arctic "territory" is one of the most important issues in the world right now." means global warming will spread water over lowlands.
Also, I did some research the other week about global warming... There is a global warming TREND for the past 200 years, ever since the "little ice age" started to end. The issue is the warming correlates with increased carbon dioxide found in ice, NOT emissions!
As is my understanding, it was not until 2000 when carbon dioxide emissions exceeded levels from 200 years ago when the US slowed its burning of almost all the forest for energy.
Anyone who has taken intro to stats knows that correlation does not equal causation! Major volcanic eruptions would cause global cooling AND increases carbon dioxide in the atmosphere(of which there has not been in 200 years). Wouldn't these periods in the ice measurements show high enough P values to make it immoral to accept the correlation hypothesis? These are written off as outliers, as is this past year where we saw a .5 degree Celsius DECREASE in average global temperatures(as large as the increase in temperature over the past 150 years).
This decrease was POSSIBLY due to the failure of the last sunspot cycle to reach a peak (correlating with hotter weather). We may be going into another "little ice age", and the global warming we experienced for the past 200 years may have saved more lives than it potentially destroyed!! Only the next 2 decades will tell. Either way, the solution is simple: we need to invest more in Pro-life research.
Also, don't worry about the arctic, the US will definitely control that territory as it does the others.
Posted by: Brainwarped at Mar 7, 2008 7:06:36 PM
odograph: I have a PhD. Not in climate science, but in engineering. Do I still get to comment?
(Though my skepticism was merely pointing out that it's way too early to be making plans on the assumption of sea ice melt as we actually have slightly more sea ice than normal.)
Posted by: Jody at Mar 7, 2008 8:10:35 PM
Mathew, do you notice that people bet all the time on Wall Street? Some of them win, but it's harder to tell when they are right for the right reasons. Certainly though, the ability to find a market for a bet does not prove truth.
Jody, you might have quite interesting opinions, but you know, we in engineering rely not just on skill but domain knowledge. If you prefer your answers (for bridge building or climate change) from those without the domain knowledge (or those that dabble) I'd worry.
Some of this gets back to a sort of "successful man's disease." Some of those who have skills or have succeeded, still retain the ability to judge themselves honestly in a new domain. Others are a little ... presumptuous.
I saw that when we all cashed our dot-com options, and some of the best engineers blew their money on bad investments the fastest.
Heh, so having seen engineers as investors should I be ready to see them (or other engineers) suddenly set themselves as climate scientists?
Posted by: odograph at Mar 7, 2008 8:30:15 PM
