The Nordic region is an attractive option for strengthening Europe’s external digital connectivity through submarine cables across the Arctic region. Low temperatures and ample access to renewable energy sources allow data centres to be more energy effective and emit less CO2 in the Nordic region than in other geographical locations in Europe. Additionally, we estimate that an Arctic cable could boost GDP in the Nordic region by more than EUR 1 billion annually.
However, barriers are in the way for Arctic cables to succeed; Submarine cables in the Arctic have not been done previously and the cable construction thus entails risk, the demand for traffic through new cables is uncertain, and some of the gains from increased connectivity will not accrue directly to investors but to the wider society instead. To avoid potential market failures, governments can support the development of submarine cable projects indirectly through research and education networks acting as anchor tenants, which would also benefit research and education institutions.
Learn more about the societal benefits of an Arctic submarine cable here.
For further information, please contact Morten May Hansen, Senior Economist.