Homework Help: Why do you suppose that firms in Arctic nations are already developing specialized tanker ships and platforms for use in privately accessible Arctic areas?. What are possible opportunity costs of opening Arctic lands to private extraction of as-yet unavailable resource endowments?

Could unfreezing Arctic endowments heat up aggregate supply growth?

The volume of untapped Arctic oil is thought to be sufficiently large to provide the entire world’s requirements for about half a year, and today’s technology could fuel global natural gas requirements for an estimated 2 years. If all estimated Arctic oil could be extracted, it would last the world at least 3 years, and all of the region’s likely natural gas reserves would be enough for about 25 years. Mineral endowments are less certain, but most geologists suspect that unexploited Arctic and near-Arctic lands contain vast amounts of metal ores.

Of course, making most Arctic resources accessible to private producers would gradually add to annual flows of resources that residents of northern nations such as the United States could use to produce goods and services. Estimates indicate that drawing on these endowments would boost annual U.S. real GDP growth by an appreciable fraction of a percentage point. Thus, reducing government ownership of these underutilized and untapped endowments would contribute to higher economic growth.

a. Why do you suppose that firms in Arctic nations are already developing specialized tanker ships and platforms for use in privately accessible Arctic areas?. What are possible opportunity costs of opening Arctic lands to private extraction of as-yet unavailable resource endowments?

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