Economics is the study of trade-offs: Costs versus benefits, wants versus needs. We have all heard about the costs of global woarming. Today, the New York Times reports on some of the benefits.
Even before the polar ice began shrinking more each summer, countries were pushing into the frigid Barents Sea, lured by undersea oil and gas fields and emboldened by advances in technology. But now, as thinning ice stands to simplify construction of drilling rigs, exploration is likely to move even farther north.
Last year, scientists found tantalizing hints of oil in seabed samples just 200 miles from the North Pole. All told, one quarter of the world's undiscovered oil and gas resources lies in the Arctic, according to the United States Geological Survey.
The polar thaw is also starting to unlock other treasures: lucrative shipping routes, perhaps even the storied Northwest Passage; new cruise ship destinations; and important commercial fisheries.
We all know that global warming has its costs. But as an economist, I am forced to recognize the benefits too. Do the benefits outweigh the costs? I doubt it, but who knows. It's all about the trade-offs.
