CLIMATE CHANGE IMPACT ON ECONOMIC GROWTH AND SPECIFIC SECTORS’ DEVELOPMENT OF THE RUSSIAN ARCTIC

Arctic plays a strategic role in the Russian economy and experiences a strong impact from climate change characterized by intensive warming, precipitation increase and more frequent and severe hydrometeorological disasters. The paper contemplates the macroeconomic and economic sectors’ impacts produced by climate change both on the Russian Arctic zone and Russia as a whole. Methodological issues of climate change impact assessment at macroeconomic level are considered. It is argued that such impacts produce ambivalent effects on economic growth and economic activity but overall effect on the national economy is likely to be negative.

Specificities of climate change impact on the Northern Sea Route are analyzed and its future capacity as an 16 international transit route is estimated and reckoned highly competitive if current shortcomings (shortages of ice-friendly ships and ice-breakers; lack of deep water ports and infrastructure etc) are resolved. Climate change impacts on energy consumption and resilience of energy infrastructure in the Russian Arctic are considered. It is substantiated that by 2050 climate warming will lead to 10—20% reduction of energy heating period in the region. Constructions, buildings and transport infrastructure resilience to climate related hazards are assessed.

As calculations show, potential annual losses from damage to buildings and constructions in the Russian Arctic reach some 200 billion rubles (US$3,3 billion) which makes up 2,5% of the regional domestic product of the Russian Arctic zone. It is argued that almost 100 billion rubles (US$1,7 billion) of additional annual investments in the housing sector of the Russian Arctic zone are needed to withstand negative climate change impacts for 2017—2050.

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