Foreign Affairs: Arctic Boom

 

The Coming Arctic Boom

As the Ice Melts, the Region Heats Up

By Scott G. Borgerson, July/August 2013.

The ice was never supposed to melt this quickly. Although climate scientists have known for some time that global warming was shrinking the percentage of the Arctic Ocean that was frozen over, few predicted so fast a thaw. In 2007, the Intergovernmental Panel on Climate Change estimated that Arctic summers would become ice free beginning in 2070. Yet more recent satellite observations have moved that date to somewhere around 2035, and even more sophisticated simulations in 2012 moved the date up to 2020. Sure enough, by the end of last summer, the portion of the Arctic Ocean covered by ice had been reduced to its smallest size since record keeping began in 1979, shrinking by 350,000 square miles (an area equal to the size of Venezuela) since the previous summer. All told, in just the past three decades, Arctic sea ice has lost half its area and three quarters of its volume. 

It’s not just the ocean that is warming. In 2012, Greenland logged its hottest summer in 170 years, and its ice sheet experienced more than four times as much surface melting as it had during an average year over the previous three decades. That same year, eight of the ten permafrost-monitoring sites in northern Alaska registered their highest-ever temperatures, and the remaining two tied record highs. Hockey arenas in northern Canada have even begun installing refrigeration systems to keep their rinks from melting.

Not surprisingly, these changes are throwing the region’s fragile ecosystems into chaos. While tens of thousands of walruses, robbed of their ice floes, are coming ashore in northwest Alaska, subarctic flora and fauna are migrating northward. Frozen tundras are starting to revert to the swamplands they were 50 million years ago, and storms churning newly open waters are eroding shores and sending the homes of indigenous populations tumbling into the sea.

No matter what one thinks should be done about global warming, the fact is, it’s happening. And it’s not all bad. In the Arctic, it is turning what has traditionally been an impassible body of water ringed by remote wilderness into something dramatically different: an emerging epicenter of industry and trade akin to the Mediterranean Sea. The region’s melting ice and thawing frontier are yielding access to troves of natural resources, including nearly a quarter of the world’s estimated undiscovered oil and gas and massive deposits of valuable minerals. Since summertime Arctic sea routes save thousands of miles during a journey between the Pacific Ocean and the Atlantic Ocean, the Arctic also stands to become a central passageway for global maritime transportation, just as it already is for aviation.

Part of the reason the Arctic holds so much promise has to do with the governments surrounding it. Most have relatively healthy fiscal balance sheets and, with the exception of Russia, predictable laws that make it easy to do business and democratic values that promote peaceful relations. The Arctic countries have also begun making remarkably concerted efforts to cooperate, rather than fight, as the region opens up, settling old boundary disputes peacefully and letting international law guide their behavior. Thanks to good governance and good geography, such cities as Anchorage and Reykjavik could someday become major shipping centers and financial capitals — the high-latitude equivalents of Singapore and Dubai.

Of course, while Arctic warming is a fait accompli, it should not be taken as a license to recklessly plunder a sensitive environment. If developed responsibly, however, the Arctic’s bounty could be of enormous benefit to the region’s inhabitants and to the economies that surround it. That’s why all the Arctic countries need to continue their cooperation and get to work establishing a shared vision of sustainable development, and why the United States in particular needs to start treating the region as an economic and foreign policy priority, as China is. Like it or not, the Arctic is open for business, and governments and investors have every reason to get in on the ground floor.

Climate change is transforming the Arctic from a geopolitical afterthought into an epic bounty ripe for this century’s entrepreneurs. Countries should continue their commitment to the peaceful course they have charted there so far. But policymakers need to get serious about establishing a shared vision of how to harness the Arctic’s resources. Economic development need not mean environmental disaster. Indeed, the opening up of the Arctic offers a once-in-a-lifetime opportunity to develop a frontier economy sustainably.

For such an approach to catch on, countries will have to strike the right balance between environmentalism and exploitation. One way to blend capitalism with conservationism is to value nature as a form of capital and price the environment into development decisions, as programs that manage fisheries by allocating catch shares have done and as programs that protect forests by creating tradable securities have done, too. For this tactic to work in the Arctic, there needs to be a full accounting of the available resources, which is why it is so important for governments, nongovernmental organizations, and others to conduct a comprehensive census of the region’s natural resources and biological diversity. …

For complete article, see Scott G. Borgerson, The Coming Arctic Boom, Foreign Affairs, July/August 2013.

(Emphasis added)