Distributional Effects of the Ice Road–Climate Nexus and Their Economic Implications

Abstract

Estimating the ice road–climate nexus and its associated future outcomes are complicated by the heterogeneity in ice road operation days, climate thresholds, and ice road networks. Here we use, for the first time, a spatially filtered unconditional quantile method that explicitly accounts for ice road distributions, thresholds, and spatial attributes to determine the impact of climate factors on ice road operation days in the Northwest Territories. Subsequently, we use the regression estimates and bias-adjusted CMIP5 climate models to project ice road operation days under two different climate scenarios (RCP4.5 and RCP8.5) and estimate their economic impacts. We find that climate factors significantly affect the ice road operation days, especially in the lower and median quantiles. When we use the lower quantile (62 days of historical ice road operations) as a reference, ice road operations decrease to 59 days (RCP4.5) and 53 days (RCP8.5) in the near future (2021–2040). In the medium future (2041–2060), ice road operations decrease to 47 days (RCP4.5) and 43 days (RP8.5). In the far future (2061–2070), ice road operations decrease to 35 days (RCP4.5) and 31 days (RCP8.5). Our simulations suggest that these reduced future ice road operation days adversely affect the local economy and translate into reduced salaries and employment. Our results emphasize implementing stringent climate mitigation policies to alleviate the consequences of reduced ice road operations in the future.