A multiperiod model for assessing the socioeconomic impacts of oil spills during Arctic shipping

As the rate of ice melt in the Arctic increases, the potential for shipping activities is also increasing. However, infrastructure along the northwest passage (NWP) in Canada’s Arctic is almost nonexistent. This presents major challenges to any response efforts in the case of a natural disaster. Also, the Arctic is home to many indigenous communities, as well as flora and fauna. Thus, it is of vital importance to protect the livelihood of the rights holders in this area and the Arctic marine environment. To do this, it is necessary to develop a decision-making tool to assess the potential risk of pollutants arising from increased shipping activity.

Understanding such, the latest portstudy by PortEconomics member Adolf Ng co-authored with Mawuli Afenyo and Changmin Jiang (Texas A & M University), assesses the impacts of a potential oil spill on communities in the Canadian Arctic. The consequences of risk are presented using a multiperiod model while the likelihood is analyzed using Bayesian Network. The output of the multiperiod model is incorporated into an influence diagram for risk assessment purposes.

The Bayesian model benefits from expert elicitation from the crew aboard a research ship passing through the NWP. Information was also obtained from marine insurance companies, government representatives, and other Arctic specialized professionals. The risk-based model is subsequently applied to the Canadian Arctic area, with the aim of evaluating the impact of a potential oil spill through shipping.

Source: porteconomics.eu