Socio-economic impacts of shipping along the Northwest Passage: The cost to locals

Abstract

This paper presents a novel approach to assessing the cost of container liner shipping through the Northwest Passage (NWP) on northern local communities. Based on some representative communities, concerns of the residents of these Canadian Arctic regions were assessed. Two essential factors to the well-being of the community members—air pollution and oil spills—are considered in our model. The approach was therefore used to evaluate the socio-economic impact of Arctic container liner shipping in Canadian Arctic regions. More specifically, the approach adopted a) uses a logit model to estimate the market share of NWP for commercial liner shipping; b) investigates different scenarios to evaluate the feasibility of commercial liner shipping through the NWP; c) incorporating concerns from the local communities, conducts a socio-economic analysis for the communities. With the analysis of the socio-economic impacts on local communities, the study would help guide governments on how to evaluate and calculate transit fees for transiting NWP. The study is imperative in supporting decision-making to shape Arctic policy. Furthermore, it gives stakeholders an idea of the market dynamics of shipping in the Arctic area.