The impact of opening the Arctic Northeast Passage on China's carbon emissions

Abstract

The increase in shipping along Arctic routes has resulted in an increasing need for the environmental effects of shipping to be considered. Existing studies on the environmental impact of Arctic routes have focused mainly on shipping operations and have paid little attention to the dynamic features of opening new shipping routes. In light of the continuing retreat of Arctic sea ice, this study aimed to predict changes in China's CO₂ emissions from a production perspective via scenarios of the opening of the Arctic Northeast Passage (NEP) in different future years (2025, 2030, 2035). A shipping cost model was first developed to calculate the changes in shipping costs resulting from commercial use of the NEP. Then, an energy-environmental version of the Global Trade Analysis Project (GTAP-E) model and the GTAP-E 10.0 database were used to simulate the changes in CO₂ emissions that may arise from the economic adjustments to the opening of the NEP. The driving factors and possible mechanisms of the environmental effects of the NEP were analyzed based on the simulation results. The re-simulation for the environmental effects of opening the NEP taking emission control policies into account was performed. The findings showed that the opening of the NEP would increase global CO₂ emissions. This effect would gradually increase over time. For China, opening the NEP would initially reduce short- and medium-term CO₂ emissions owing to upgrades of sectoral structure, while ultimately elevating emissions in the long run due to a large expansion in trade and the economy. The economic growth driven by commercial use of the NEP would tend to optimize the Chinese sectoral and energy structure in the short run. Notably, emission control policies would markedly affect the aforementioned environmental outcomes of opening the NEP.