Leading the Unwilling: Unilateral Strategies to Prevent Arctic Oil Exploration
Justin Leroux and
No 6629, CESifo Working Paper Series from CESifo
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
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
Journal Article: Leading the unwilling: Unilateral strategies to prevent arctic oil exploration (2018)
Working Paper: Leading the Unwilling: Unilateral Strategies to Prevent Arctic Oil Exploration (2018)
Working Paper: Leading the Unwilling: Unilateral Strategies to Prevent Arctic Oil Exploration (2017)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_6629
Access Statistics for this paper
More papers in CESifo Working Paper Series from CESifo Contact information at EDIRC.
Bibliographic data for series maintained by Klaus Wohlrabe ().