EconPapers    
Economics at your fingertips  
 

Leading the Unwilling: Unilateral Strategies to Prevent Arctic Oil Exploration

Justin Leroux and Daniel Spiro

No 6629, CESifo Working Paper Series from CESifo Group Munich

Abstract: Arctic oil extraction is inconsistent with the 2°C target. We study unilateral strategies by climate-concerned Arctic countries to deter extraction by others. Contradicting common theoretical assumptions about climate-change mitigation, our setting is one where countries may fundamentally disagree about whether mitigation by others is beneficial. Arctic extraction requires specific R&D, hence entry by one country expands the extraction-technology market, decreasing costs for others. Less environmentally-concerned countries (preferring maximum entry) have a first-mover advantage but, being reliant on entry by others, can be deterred if environmentally-concerned countries (preferring no entry) credibly coordinate on not following. Furthermore, using a pooling strategy, an environmentally-concerned country can deter entry by credibly “pretending” to be environmentally adamant, thus expected to not follow. A rough calibration, accounting for recent developments in U.S. politics, suggests a country like Norway, or prospects of a green future U.S. administration, could be pivotal in determining whether the Arctic will be explored.

Keywords: arctic region; oil exploration; climate change; geopolitics; unilateral action (search for similar items in EconPapers)
JEL-codes: D82 F50 O33 Q30 Q54 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ene and nep-env
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
https://www.cesifo-group.de/DocDL/cesifo1_wp6629.pdf (application/pdf)

Related works:
Journal Article: Leading the unwilling: Unilateral strategies to prevent arctic oil exploration (2018) Downloads
Working Paper: Leading the Unwilling: Unilateral Strategies to Prevent Arctic Oil Exploration (2018) Downloads
Working Paper: Leading the Unwilling: Unilateral Strategies to Prevent Arctic Oil Exploration (2017) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_6629

Access Statistics for this paper

More papers in CESifo Working Paper Series from CESifo Group Munich Contact information at EDIRC.
Bibliographic data for series maintained by Klaus Wohlrabe ().

 
Page updated 2019-10-22
Handle: RePEc:ces:ceswps:_6629