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Arctic Governance

The Arctic is becoming increasingly important to each country’s national security - Russia and China, in particular, have accelerated their military and economic focus on the region. Russia has sought to reassert its military presence in the Arctic since the end of the 2000s, and in 2018 it began working to restrict the passage of foreign warships in the Arctic Ocean, according to the Estonian think tank the International Centre for Defence and Security.


As the strategic value of the region increases, so do questions about how its affairs are managed. The transformation of the Arctic has introduced new geopolitical and geo-economic challenges, and significantly expanded the number of stakeholders involved in decision-making. These complexities stem from the international nature of the Arctic’s challenges, like the impacts of climate change and expanding polar shipping routes.

 The Arctic Council is the official coordinating body for intergovernmental cooperation on a wide range of issues - its six working groups cover contaminants, monitoring and assessment, conservation of flora and fauna, emergency preparedness and response, marine protection, and sustainable development. Eight member states participate in the Council: Canada, Denmark (Greenland), Finland, Iceland, Norway, Russia, Sweden, and the US. Six indigenous groups are represented as Permanent Participants, 13 non-Arctic states have been granted Observer status, and non-state actors also engage as Observers.

As it has sought to address cross-border challenges, the current governance structure, with the Arctic Council at its forefront, has been criticized for lacking real power to implement lasting, effective, and legally-binding solutions. Ultimately, it is up to each participating state to implement and enforce the recommendations developed by the Council.


While other legal frameworks establish some rights and limitations for Arctic nations, including measures developed via the International Maritime Organization or the UN Convention on the Law of the Sea, they may not be adequate to address the unprecedented challenges now on the horizon. Increasing access to the Arctic’s natural resources, coupled with mounting geopolitical tensions among several key Arctic players, has raised questions about the future of governance in the region.


While the Arctic Council is prohibited from engaging in military security, the growing strategic importance of the region for many of the world’s largest militaries has created uncertainty about how related developments will be managed.

Arctic Transport and Shipping


As the region opens up to more shipping and tourism, its fragile environment is increasingly threatened. Further loss of sea ice is expected, suggesting that the competitiveness of these routes will only continue to grow. However, the new routes’ commercial viability is highly dependent on weather and ice conditions, and on the existence of viable infrastructure to support commercial operations.


Melting Arctic sea ice is opening new shipping routes that are gradually transforming the region’s commercial relationship with the rest of the world. New routes include the Northwest Passage tracing North America’s coastline, the Transpolar Sea Route cutting across the Arctic Ocean, and the Northern Sea Route along the coast of Russia. These have shortened shipping distances from Asia to Europe by up to 40%, cutting both travel days of and fuel costs while potentially reducing related carbon dioxide emissions.

 Among them, the Northern Sea Route is the most commercially viable and has been home to a growing number of liquefied natural gas shipments from Russia’s Yamal Peninsula to Asia during the summer. The increased production of liquefied natural gas, crude oil, and coal contributed to the 15 million tons of cargo transported along the Northern Sea Route between January and November 2018, compared with roughly 9.7 million tons during 2017, according to media reports.

The Arctic cruise ship tourism industry has also been expanding, as the region becomes a more popular destination. By 2022, dozens of new vessels capable of traversing the Arctic are expected to be added to the existing global cruise ship fleet. As commercial and tourism-related traffic increase, the enforcement of safety standards is key - though a lack of infrastructure continues to hinder rescue capabilities.


A shipping boom in the region could conceivably lead to a Titanic-like disaster or an accident like the 1989 Exxon Valdez oil spill in Alaska. And while climate change may be increasing shipping opportunities, it is also causing permafrost (frozen ground) to thaw in the region, damaging roads, harbors, and airports in the process. Thawing permafrost is expected to continue to increase, as related costs to Alaska’s transportation infrastructure have already topped $10 million annually.


Increased tourism has meanwhile created demand for more flights to the Arctic and a need for improved airport infrastructure; for example, Nextjet began servicing a route connecting Arctic Norway, Sweden, and Finland with a larger, 50-seat jet in 2017. The multinational Arctic Maritime and Aviation Transportation Infrastructure Initiative has helped foster greater cooperation on transportation issues in the region.

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Climate change is warming the Arctic region faster than any other place on Earth, creating dramatic consequences for everyone. Arctic sea ice fell to a record low in July 2019, and by 2050 as much as 45% of existing Arctic infrastructure will be at high risk due to permafrost thaw - which is also releasing carbon and methane that accelerate global warming through “climatic feedback.”


As offshore oil and gas exploration and shipping become technologically and economically feasible in the Arctic, significant increases in BC emissions that originate in the Arctic can be expected. This is due to the expansion of mining, energy and transport activities into newly accessible areas that were previously ice-bound – especially along the Russian Arctic coast, but also in Greenlandic and North American Arctic areas.


In addition to having potentially severe health and climatic effects in the Arctic itself, these emissions could also reach lower latitudes, thereby aggravating the environmental health risks posed by air pollution in Europe, too.


The changing climate has unlocked economic opportunities tied to oil, gas, mineral resources, and increasingly accessible shipping routes - placing added stress on the region’s biodiversity and people. Meanwhile increasing plastic pollution has endangered one of the most pristine environments left on the planet. As these emerging challenges are addressed, it must be done in a way that ensures benefits are shared with local communities.


The changing Arctic raises a number of interrelated questions:

  •  How will the use of Arctic resources (especially from mining and offshore oil and gas production) and other economic activities such as shipping and fishing change the Arctic region?

  • How will SLCPs (especially black carbon) and greenhouse gas emissions influence the Arctic environment, particularly with regard to sea-ice development?

  • What are the likely impacts of ongoing transformations on Arctic communities and the environment?

  • What can be done to make the processes of interaction and decision-making among different stakeholders on multiple scales (state, non-state, local, regional, national, international) more effective in transitioning to sustainable Arctic futures?

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Arctic Infrastructure Gap


One of the biggest challenges for the Arctic is a lack of infrastructure. About a third of the infrastructure in the region is susceptible to thaw-related instability. Except for areas in Norway and western Russia, the Arctic remains vastly underserved by roads, ports, and other infrastructure needed to boost economic growth and development.


Current infrastructure development is generally geared towards furthering natural resource exploration, and there is a need to better involve local Arctic communities in the development of related projects that take into consideration community development and environmental sustainability. Better telecommunications infrastructure (including broadband connectivity) could also catalyze economic development, and is vital for emergency-response capacity, education, cultural preservation, and community health.

 In 2019, the investment firm Guggenheim Partners estimated that the Arctic may require more than $1 trillion worth of infrastructure to support a healthy, sustainable economy (Guggenheim was instrumental in developing the WEF’s Arctic Investment Protocol, global guidelines to ensure that investment delivers sustainability). Developing Arctic infrastructure involves a relatively high degree of economic and environmental risk, given the remote locations and changing environment. In many cases, projects like roads and airports in particularly isolated areas are simply not commercially viable, despite being necessary to facilitate more ambitious investment opportunities in the future.

Climate change is also triggering infrastructure challenges in the region, particularly in the form of permafrost (frozen ground) thaw and melting sea ice in coastal regions. In severe cases, villages were built on permafrost and relied on the coastal ice sheet to provide protection from erosion, and now find themselves stranded in flood zones and pondering relocation (Alaskan villages like Newtok, Kivalina, and Shismaref have chosen this option).


According to a study published in Nature in 2018, some 70% of infrastructure in the permafrost domain is in areas with a high potential for the thawing of near-surface permafrost by 2050, and a third of all Arctic infrastructure (and 45% of hydrocarbon extraction fields in the Russian Arctic) is in regions where thaw-related ground instability can cause serious damage.


Even if the targets established by the Paris agreement on climate change are achieved, much of the Arctic’s infrastructure will be impacted - making it crucial to plan now for a difficult future. Funding is a critical first step for any project, and clear government strategy that involves cross-border collaboration and private sector partnerships may be essential.

Arctic Natural Resources


As Arctic ice melts, there is an increasing focus on exploiting its natural resources. The region’s wealth of oil, gas and minerals calls for sustainable planning. According to the US Geological Survey, the Arctic region is home to an estimated 13% of the world’s undiscovered oil resources, and 30% of untapped gas resources. .


Russia, which holds the largest amount of territory in the region, has identified the Arctic as key for the country’s future; its Yamal Peninsula gas projects alone are expected to eventually produce up to 360 billion cubic meters of gas per year. Liquefied natural gas from Yamal’s first development phase is already being shipped to China, along increasingly-accessible polar shipping routes.

 The Arctic is also rich in renewable resources, especially in terms of hydropower and wind, and much of it has not yet been fully exploited. Projects incorporating renewable energy sources into isolated, diesel-driven energy systems in the region are ongoing, in order to increase local energy security, lower costs, and improve air quality. A growing number of Arctic communities have implemented renewable energy projects, in places like the Yakutia region of Russia.

In some parts of the Arctic including in Iceland and Norway, industries are increasingly taking advantage of local green energy to do things like power data centers. In addition to natural energy, the Arctic is rich in metal and mineral resources, including diamonds, gold, copper, zinc and rare earth elements such as uranium.


Most parts of the Arctic feature some mining, but there is tremendous potential for growth. In addition, the Arctic has vast marine resources; some Arctic states rank among the top marine producers in the world, including Russia, Canada, Iceland, and Norway.


The ocean remains a key food source for people in the region, and responsible marine resource management is crucial. In general, the question of balancing Arctic economic development with environmental conservation promises to remain a topic of intense debate given the risks associated with development. Serious efforts must be made to ensure that future exploitation of the region’s natural resources unfolds sustainably, so that this unique and vulnerable environment is maintained for future generations.

Arctic Environmental Risk and Degradation


Adverse environmental changes like increased in plastic pollution can directly affect regional biodiversity including people, plants, and animals - making it critical to at least mitigate (or in some cases entirely avoid taking) environmental risks in order to safeguard the environment for future generations. For example, an oil spill in the Arctic can be relatively difficult to clean up due to a lack of local response capabilities; in addition, oil decomposes less quickly in colder water, meaning a spill could pose a threat to human and animal populations for longer periods of time.


Increased plastic pollution has been detected in the region, and further development poses serious environmental threats. In addition to climate change, the Arctic faces environmental threats like marine plastic pollution, mining contamination, poor water quality, threatened biodiversity, and an increasing risk of oil spills - much of it associated with increased shipping traffic and resource extraction.

 Fossil-fuel extraction not only raises risks related to increased emissions, but also increases the odds of spills that can contaminate local air, soil, and water. Heavier maritime traffic meanwhile increases pollution via fuel use and greater rates of waste generation. Ocean vessels can generate waste including sewage and machinery lubricant, according to a brief published by the Pew Charitable Trusts in 2018, which can disturb the marine ecosystems on which Arctic populations depend - and reduce the availability of traditional food.

Research has demonstrated that ocean currents have been naturally transporting plastic pollution into the Arctic, much of it originating in distant locations; this particular issue is currently a priority of the Arctic Council, an intergovernmental forum that, led by Iceland’s chairmanship, is expected to yield the first pan-Arctic strategy to decrease marine litter.


Increased tourism and trade can also affect Arctic biodiversity by introducing invasive species. More ship traffic, for example, raises the risk of introducing invasive species through ballast water (water carried in a ship’s tanks for balance) or other mechanisms, with potentially devasting consequences for native Arctic species.


It is critical to prioritize sustainability when planning economic development, and to evaluate and ensure environmental stewardship when considering new projects in the region - by, for example, factoring negative environmental externalities into traditional financial return calculations.

Local Arctic Communities

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At the heart of the changing Arctic is a local population of about 4 million people representing over 40 different ethnic groups and more than a dozen languages. Indigenous people in the region can thrive only if their needs are taken into account.


About 10% of the region’s inhabitants are members of indigenous communities, which are present in every Arctic country except for Iceland. Relatively recent and dramatic environmental changes have left no part of local life untouched. The melting sea ice both makes traditional hunting more difficult and transportation on ice roads connecting villages riskier, thereby decreasing food security and increasing isolation.

 In addition, the thawing permafrost (frozen ground) that rests under much of the region’s infrastructure has made it necessary to rebuild schools and other vital community structures - or, in the worst cases, relocate whole communities with dramatic social and economic consequences. These developments can exacerbate mental health challenges that have long been prominent in the Arctic, and are often related to rapid social change, limited local opportunities, and the historic oppression of indigenous people. The extent to which future development projects share benefits and empower local communities will largely determine whether these local cultures can continue to thrive.

Some Arctic communities struggle not only with prevalent mental health issues, but also a lack of resources to provide health care. Initiatives like the Arctic Mental Health Working Group, coordinated by the US Arctic Research Commission, are trying to address these challenges. One example of an unexpected consequence of economic development in the Arctic is a high male-to-female ratio in some regions, mainly due to two trends: an emphasis on traditional male occupations such as fishing and resource extraction, and local women becoming more educated and interested in jobs outside of the area.


There is a general need to focus on education and innovation in the region as a corollary to resource development - in order to support sustainable, culturally thriving, and vibrant Arctic communities. Due to the expanding footprint of resource extraction in the Arctic, the imbalances mentioned above may continue. In order to help young people better connect with their communities, share their voices, and provide their perspectives to Arctic decision-makers on trends like these, opportunities have been created including the Arctic Youth Ambassador Program.

Climate Change Science and the Arctic

The Arctic is warming at least twice as fast as the rest of the planet. A rapidly-changing climate has many ripple effects, from declining food supplies and new strains on indigenous communities to the opening up of new shipping routes and natural resource development amid melting ice and infrastructure damage. What happens in the Arctic does not stay in the Arctic when it comes to environmental impact.


Climate change does not happen in isolation - warming in the Arctic can multiply the impacts of climate change felt globally. Arctic sea ice plays a critical role in moderating Earth’s climate, for example, and research suggests that periods of extreme cold in North America and Europe are tied to changes in the jet stream partially attributable to declines in Arctic sea ice. The high “albedo,” or reflective capacity of sea ice enables it to reflect solar radiation instead of absorbing energy and accelerating surface warming.


Sea ice with snow cover can reflect up to 90% of solar energy, which preserves ice for longer periods, according to the National Snow & Ice Data Center in the US. The loss of Arctic sea ice therefore means the ocean is absorbing more solar energy, causing water temperatures to increase and triggering a feedback loop of more melting.


Arctic sea ice are regularly being broken; the four lowest maximum ice cover measurements ever were taken between 2015 and 2018.  Sea ice also influences ocean circulation, as freshwater from melting ice disturbs the density of the thermohaline currents that keep Earth’s temperatures stable. Record lows for the extent of Warmer temperatures have also made Arctic areas more prone to wildfires, which release sooty black carbon and carbon dioxide that exacerbate climate change (the historic Arctic wildfires in summer 2019 produced the equivalent to Sweden’s total yearly carbon dioxide emissions).


Each of these feedback loops is amplified by the fact that a warming Arctic enables more oil and gas extraction, which in turn contributes to climate change and worsens the impacts already being felt both in the Arctic and elsewhere. In addition, particulate matter from fires can cover ice, diminish its reflective capacity and cause more melting. Thawing permafrost (frozen ground) presents another destabilizing feedback loop, by releasing methane (among other greenhouse gases) into the atmosphere that is capable of trapping more heat than carbon dioxide.

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