This NY Times article about Iceland's geothermal energy is fascinating from a trade and investment perspetive. Basically, Iceland has lots of cheap, clean geothermal energy. They currently use it to attract investment. And they may lay a long cable so that they can export it:
the power company has conducted extensive research into the possibility of a massive extension cord — or a “submarine interconnector,” in the jargon of the trade — to plug Iceland into Europe’s electricity grid. Such a cable would probably go first to the northern tip of Scotland, which, about 700 miles away, is relatively close, and then all the way to continental Europe, nearly 1,200 miles away
This leads me to a number of IEL questions:
-- Will Iceland be accused of unfairly competing for investment by offering up cheap energy? Of course, it's just a natural advantage they have, so it's hard to see how anyone can justifiably be mad at them.
-- Some people in Iceland are concerned about exporting its energy this way. But is Iceland allowed to restrict its exports? This makes me think of Scott Lincicome's recent Cato paper on U.S. restrictions on natural gas exports.
-- And finally, if Iceland were to export electricity via a cable, would trading partners complain of competition from Iceland's low-cost energy? Will there be creative arguments that Iceland is "dumping" electricity?