M.Phil. in Technology Policy 2007/2008

Facilitating International Cooperation in an Arctic Transformed by Global Warming

Grant Michael Kopec

Dr. William J. Nutall

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1 Declaration

This Project Report is substantially my own work and conforms to the Judge

School guidelines on plagiarism. Where reference has been made to other research, this is acknowledged in the text and references.

2 Acknowledgements

I would like to thank the following people for their invaluable assistance in completing this study.

Dr. Paul Berkman, for giving the necessary guidance, background, and structure to this thesis.

Lt. Cmdr. John Ash, Royal Navy [Ret.], for providing many of the ideas and resources regarding the technical feasibility of Arctic Ocean governance.

Dr. William J. Nutall, for advising and providing useful insights on scenario analysis.

Sally Daultrey, for her work in coordinating the support for this project.

Dr. David Reiner, for general advising.

Blake Driscoll, Satya Dash, Sarah Lovell, and the rest of the Technology Policy cohort for providing both critical insights and hours of distraction in the

Judge Business School Computer Lab.

3 Abstract

The environmental state change now occurring in the Arctic Ocean as a result of global climate change has precipitated increased human access to and utility in that region. As a result, long dormant questions of Arctic Ocean governance have been brought to the forefront of international consciousness.

The United Nations Law of the Sea Convention determines the geopolitical division of the Arctic Ocean in theory. However, the formation of a stable governance arrangement in practice will depend upon the balance of the economic interests of the stakeholders in the Arctic Ocean and the ability to govern and regulate those interests in a sustainable manner.

The opportunities and ability to exploit Arctic Ocean resources and the capability of governance policies to regulate such activity combine in order to create a scenario framework that can be used to analyse the potential long term impacts of Arctic governance polices. In turn, this scenario framework can be used to formulate policies that result in a sustainable system of governance in the Arctic Ocean.

4 Facilitating International Cooperation in an Arctic

Transformed by Global Warming

Table of Contents

Declaration...... 2

Acknowledgements ...... 3

Abstract ...... 4

Table of Contents...... 5

Table of Figures...... 7

Table of Tables...... 7

Chapter 1: Arctic Ocean Governance through a Technology and Policy

Framework ...... 8

Introduction ...... 8

The Geopolitical Donut in the Arctic Ocean...... 9

Chapter 2: The Arctic Ocean State Change ...... 13

The Environmental State Change...... 13

Projected Future Environmental State Changes...... 15

Economic Opportunities and Security Threats...... 16

Chapter 3: Economic Activity and Regulation in the Arctic Ocean ...... 17

The Current Arctic Fervour ...... 17

Hydrocarbon Resources...... 18

Metallic Mineral Resources...... 22

Biological Resources...... 23

Shipping Lanes and Tourism...... 25

Conclusions on the Economic Exploitation of the Arctic Ocean ...... 27

Chapter 4: Governance in the Arctic Ocean...... 27

The Common Heritage of Mankind ...... 27

5 Arctic Governance Parallels with the Antarctic Treaty System...... 28

National Claims to the Arctic Commons under UNCLOS III ...... 31

UNCLOS III as a Test ...... 33

Governance Scenarios Coupled with the Environmental State Change...... 35

The Svalbard Treaty as a Precedent for Practical Implementation of Arctic Ocean

Governance...... 35

Chapter 5: Arctic Governance Scenarios ...... 38

The Arctic Ocean from a Global Perspective ...... 38

A Governance vs. Economic Exploitation Scenario...... 39

Scenario Analysis...... 41

Wild Cards...... 46

Chapter 6: Conclusions...... 47

Towards an International Governance Regime under UNCLOS III...... 47

Future Work...... 48

Definitions...... 50

Abbreviations and Nomenclature...... 50

References...... 51

6 Table of Figures

FIGURE 1: THE CURRENT GEOPOLITICAL SITUATION IN THE ARCTIC OCEAN, AS DIVIDED BY UNCLOS III. THE LIGHT BLUE AREA REPRESENTS THE EXCLUSIVE ECONOMIC ZONES (200 NM LIMIT) OF THE CLAIMANT NATIONS. THE DARK BLUE AREA IN THE CENTRE REPRESENTS THE ZONE BEYOND CLAIMANT NATIONS’ 200 NM LIMIT BUT WHICH COULD FALL UNDER NATIONAL JURISDICTION UNDER A CLAIMED EXTENSION OF THE CONTINENTAL SHELF. THE WHITE AREAS REPRESENT PARTS OF THE ARCTIC OCEAN WHERE NO NATIONAL CLAIMS TO SOVEREIGNTY COULD LIKELY BE MADE (MACNAB 2007, P. 3). TAKEN TOGETHER, THE DARK BLUE AND WHITE AREAS OF THE MAP REPRESENT THE ARCTIC OCEAN COMMONS...... 10 FIGURE 2: HISTORICAL AND MODELLED FUTURE PREDICTION OF ARCTIC OCEAN SEA ICE EXTENT (AHLENIUS 2007)...... 14 FIGURE 3: PROJECTIONS OF FUTURE ARCTIC SEA ICE EXTENT FROM MULTIPLE NATIONAL CENTER FOR ATMOSPHERIC RESEARCH MODELS (HOLLAND 2006).....15 FIGURE 4: MAP SHOWING CURRENT AND POTENTIAL FUTURE RESOURCE EXPLOITATION IN THE ARCTIC REGION (REKACEWICZ 2005)...... 20 FIGURE 5: PLOT OF THE NUMBER OF NATIONS THAT ARE PARTIES TO THE ANTARCTIC TREATY SYSTEM VS. TIME (BERKMAN 2002, P. 72)...... 30 FIGURE 6: MAP OF SUSPECTED OIL AND GAS DEPOSITS OVERLAID WITH THE CURRENT TERRITORIAL DISPUTE BETWEEN NORWAY AND RUSSIA IN THE BARENTS SEA REGION (REKACEWICZ 1998)...... 37 FIGURE 7: SCENARIO FROM THE GLOBAL BUSINESS NETWORK AND THE ARCTIC COUNCIL’S PROTECTION OF THE ARCTIC MARINE ENVIRONMENT WORKING GROUP (GLOBAL 2008)...... 39 FIGURE 8: SCENARIO SPACE DESCRIBING FOUR DIFFERENT SCENARIOS BASED ON A COMBINATION OF THE TECHNICAL CAPABILITY OF NATIONAL AND EXTRA- NATIONAL BODIES TO GOVERN THE ARCTIC OCEAN AND THE TECHNICAL CAPABILITY TO EXTRACT ARCTIC OCEAN RESOURCES. INSPIRATION FOR THIS SCENARIO WAS DERIVED FROM THE GLOBAL BUSINESS NETWORK REPORT TITLED THE FUTURE OF ARCTIC MARINE NAVIGATION IN MID-CENTURY (GLOBAL 2008)...... 43

Table of Tables

TABLE 1: ARCTIC OCEAN CLAIMS MADE TO THE UN COMMISSION ON THE LIMITS OF THE CONTINENTAL SHELF...... 11

7 Chapter 1: Arctic Ocean Governance through a Technology and Policy Framework

Introduction

Governance of the Arctic Ocean has long been an unresolved issue that mattered little because the extensive sea ice coverage prevented significant economic activity beyond the immediate costal areas of the Arctic Ocean claimant states of Russia, the United States, Canada, Denmark 1, and Norway.

However, because of the continuing reduction of the Arctic Ocean sea ice due to global climate change, the Arctic Ocean is becoming more accessible to human economic activity. As a result, the problem of peaceful governance of an Arctic Ocean has been brought to the forefront of international consciousness. While the resolution of governance in the Arctic Ocean is ultimately a political question, the technological viability of future economic activity in the Arctic Ocean and the technology and policies put in place to regulate that activity will ultimately determine the effectiveness of the Arctic

Ocean governance framework. Such issues will play a pivotal role in determining whether governance under a framework provided by the United

Nations Law of the Sea Convention (UNCLOS III) can be successfully implemented in the Arctic Ocean.

Whichever form of governance eventually holds jurisdiction in the Arctic

Ocean commons, it is uncontroversial to state that that form of governance should be sustainable 2 from an environmental, economic, and geo-political

1 Denmark’s Arctic Ocean claim stems from its sovereignty over the province of Greenland.

2 The Brundtland definition of sustainability accepted by the United Nations is used in this paper. This definition states that: “Sustainable Development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs” (Brundtland 2005).

8 perspective. However, the precedent set by the history of overexploitation of resources in other marine areas, combined with the unique environment of the Arctic Ocean, presents a unique set of challenges for sustainable governance in the Arctic Ocean. It remains to be seen whether the economic interests of many stakeholders can be balanced with the ability to implement sustainable governance for all.

Though these questions cannot be definitively answered at the moment, a scenario framework can be constructed where the technical feasibility of economic activity and the effectiveness of governance and regulation in the

Arctic Ocean can be examined in combination. From this framework, a better understanding of the range of possibilities for the future of the Arctic Ocean and the important determinants for that future can be derived.

The Geopolitical Donut in the Arctic Ocean

Despite the historical longitudinal Arctic claims that traditionally divided the

Arctic Ocean into slices 3 , the current geopolitical status of the Arctic is ostensibly determined by UNCLOS III. As seen in Figure 1, applying the standard 200 nautical mile (nm) wide Exclusive Economic Zone (EEZ) set forth in UNCLOS III results in an Arctic Ocean divided like a donut, with an outer ring consisting of the EEZs of the five claimant nations. Although there are minor territorial disputes in this outer ring (CIA 2008), these should not be considered to be particularly intractable, though the substance of those arguments informs the debate over the whole Arctic Ocean.4

3 Historically, Canada’s claims extended between 60 OW and 141 OW, Russia’s between 30 OE and 169 OW, Norway’s between 5 OE and 35 OE, Denmark’s between 60 OW and 10 OW, and the

United States’ between 170 OW and 141 OW (Gould 1948).

4 The current terrestrial territorial disputes within the Arctic Circle include Hans Island

(between Canada and Greenland), the Bering Strait (between the U.S. and Russia), the

9

Figure 1: The current geopolitical situation in the Arctic Ocean, as divided by

UNCLOS III. The light blue area represents the Exclusive Economic Zones

(200 nm limit) of the claimant nations. The dark blue area in the centre represents the zone beyond claimant nations’ 200 nm limit but which could fall under national jurisdiction under a claimed extension of the continental shelf. The white areas represent parts of the Arctic Ocean where no national claims to sovereignty could likely be made (Macnab 2007, p. 3). Taken together, the dark blue and white areas of the map represent the Arctic Ocean commons.

The hole in the middle of the donut, called the Arctic Ocean commons, is in dispute because Russia, Norway, Canada, and Denmark have all submitted claims to UNCLOS III based upon naturally occurring extensions of their continental shelves (Borgerson 2008, p. 63). The current claims can be seen in

Svalbard Archipelago EEZ (between Norway and Russia), and the Beaufort Sea (between the

U.S. and Canada), (CIA Factbook, 2008).

10 Table 1. Whether or not these claims are granted will determine if the Arctic

Ocean commons are preserved for the peaceful use of all mankind, as stipulated in the text of UNCLOS III, or whether the Arctic Ocean will be substantially sectored into national jurisdictions.

Table 1: Arctic Ocean claims made to the UN Commission on the Limits of the Continental Shelf.5

Date Country Claim Submitted To Result Source 460,000 sq. The UN Request for miles in the Commission On additional (United Barents Sea, 2001 Russia the Limits of the information Nations, Norwegian Continental from the 2008) Sea, and Shelf CLCS Arctic Ocean The UN Barents Sea, Commission On (United Norwegian 2006 Norway the Limits of the Pending Nations, Sea, and Continental 2008) Arctic Ocean Shelf None (Borgerson, Pending Canada None N/A specified 2008) None (Borgerson, Pending Denmark None N/A Specified 2008)

Since the current EEZs of the five arctic claimant nations are governed by their respective national regulations, the question of international governance obviously does not extend to these regions. However, these regions along the outer edge of the Arctic Ocean are where the effects of a reduction in summer sea ice will first be felt (Overland 2008 p. 177). This, combined with the concentration of recoverable resources there means that a strong governance and regulatory regime will be necessary to ensure the sustainable

5 The United States has also adopted a position that the Chukchi Plateau off of Alaska’s north coast is a natural extension of the continental shelf, though this claim is not being prepared for submission to the CLCS since the United States has yet to ratify UNCLOS III (Benitah,

2007).

11 development of the EEZs. Given that the environmental health of the Arctic

Ocean does not obey national boundaries, it is in the interests of the Arctic claimant nations to acquiesce to international standards and practices when forming their own governance regimes in their respective EEZs.

The Arctic claimant nations have recognised this in the Ilulissat Declaration of

28 May 2008. The declaration, drafted by a conference of the representatives of the governments of all of the Arctic claimant nations, declares that, with respect to UNCLOS III,

We remain committed to this legal framework and to the

orderly settlement of any possible overlapping claims. This

framework provides a solid foundation for responsible

management by the five coastal States and other users of this

Ocean through national implementation and application of

relevant provisions. We therefore see no need to develop a

new comprehensive international legal regime to govern the

Arctic Ocean (Ilulissat 2008).

However, it is noteworthy that the declaration does not surrender the continental shelf extension claims seen in Figure 1 and Table 1

(Ilulissat 2008). Thus, although the declaration acquiesces to the authority of UNCLOS III, the majority of the Arctic Ocean could still be divided into national jurisdictions depending on the findings of the United Nations Commission on the Limits of the Continental

Shelf (CLCS).

12 Chapter 2: The Arctic Ocean State Change

The Environmental State Change

The state change process now occurring in the Arctic Ocean must be viewed on two levels. At its most basic, the progression global climate change is forcing an environmental state change in the Arctic Ocean (Arctic Council

2005, p. 2). However, this environmental state change will in turn drive a geopolitical state change state change that encompasses economic, security, and environmental concerns.

The effects of global climate change on the Arctic Ocean are too numerous and complex to be presented in depth here.6 For the purposes of examining the intersection between the economic and geopolitical effects of climate change on the Arctic Ocean, the changes in sea ice coverage and thickness and the ocean surface water temperature are relevant indicators of the state change.

Figure 2 shows the historical sea ice coverage in the Arctic Ocean, as well as one prediction of future ice coverage. The observed data suggests that the

Arctic will experience a steady decrease in summer sea ice coverage due to anthropogenic global warming. The 2007 summer sea ice coverage was found to be 40% below the minimum sea ice coverage from the 1980s (Overland 2008, p. 177). Moreover, the connection between the sea ice reduction and global warming is becoming more certain every year. It is now estimated that the chance of current trends in northern hemisphere sea ice reduction occurring because of natural climate variability is less than 2% (Vinnikov 1999, p. 1936).

6 For a complete overview of the effects of climate change on the Arctic Ocean environmental system, see the Arctic Climate Impact Assessment (Arctic Council 2005).

13

Figure 2: Historical and modelled future prediction of Arctic Ocean sea ice extent (Ahlenius 2007).

Though for obvious reasons the sea ice reduction is less extensive in other seasons than in summer, both sea ice coverage and thickness are reduced year round (Wadham 1995, p. 315). The thickness of the winter sea ice in both the

Northwest and Northeast passages, for example, could be reduced from 2.5 m to 1.8 m within this century due to climate change (Wadham 1995, p. 315). In addition, both the air and water surface temperature in the Arctic Ocean are expected to increase by an average of 2 – 3 oC by 2050 (Arctic Council 2005, p.

470).

14 Projected Future Environmental State Changes

While modelled changes in the Arctic Ocean summer sea ice extent vary widely, current models suggest that the Arctic Ocean could be ice free in the summer by the year 2030 (Overland 2008, p. 177). More conservative estimates place the incidence of an ice free summer in the Arctic Ocean sometime between 2040 and 2100 (Vinnikov 1999, p. 1936). The National

Centre for Atmospheric Research has compiled a number of Arctic Ocean sea ice models. Their predictions are shown in Figure 3 and vary between 2040 and 2100 for the year of a virtually ice free Arctic Ocean in the summer.

Regardless of the exact date for the complete disappearance of summer sea ice, the Arctic Ocean will become proportionally more open to exploitation as the sea ice progressively recedes.

Figure 3: Projections of future arctic sea ice extent from multiple National

Center for Atmospheric Research models (Holland 2006).

15 Economic Opportunities and Security Threats

Besides many detrimental changes to the Arctic Ocean ecosystem, the aforementioned environmental state change will incur several other important effects of concern to human activity and governance. First, both the sea ice reduction and sea ice thinning will open the Arctic to new opportunities for economic exploitation, including not only mineral and biological resource extraction but transportation routes and tourism (Kohn

2007, p. 25). In addition, the warming ocean waters will have an as yet unkown effect on the production of fisheries in the Arctic Ocean (Arctic

Council 2005, p. 507).

Consequently, a more economically accessible Arctic Ocean will pose new security challenges. The water underneath the arctic ice cap has long been an area inhabited by nuclear submarines from the United States, Russia, and other nations. In fact, much of the best data on arctic ice thickness and its relevance to climate change has come from these missions (National Security

2007, p. 23). In preparation for a future of increased human activity in the

Arctic Ocean, the United States military has released a study indicating that it is preparing for an increased Arctic Ocean presence in anticipation of increased economic activity and geopolitical confrontation (National Security

2007, p. 35). It is known that the other arctic claimant nations have similar plans.7

The opportunities for resource exploitation made possible by the reduction in

Arctic Ocean sea ice will likely drive national interest in that area. In turn, these interests should be leveraged to create a model of sustainable

7 Canada recently ordered the commissioning of eight new arctic patrol vessels; while

Russia’s arctic naval capability continues to be substantial (Byers 2007).

16 governance in the Arctic Ocean commons that responsibly exercises sovereignty over both economic activity and the natural environment. Since both the environment of the Arctic Ocean and the future human activity there are interconnected, the need for governance includes both the EEZs under national jurisdiction and the Arctic Ocean commons.

Chapter 3: Economic Activity and Regulation in the Arctic Ocean

The Current Arctic Fervour

From reading both the mainstream news and even some scholarly publications, one could easily form the impression that the Arctic Circle represents the last great frontier on the planet, a sort of ‘wild west’ that will draw wildcatters towards the North Pole in search of many different resources, including oil, natural gas, metals, biological materials, and transportation routes (Graff 2007). This impression of the Arctic Ocean and the subsequent attention that it has drawn northward is a mixture of truths, half truths, and ‘best case’ scenario analysis. In reality, the Arctic Ocean, while containing valuable resources, will only slowly open up to exploration and exploitation due to the timescale of the environmental state change occurring there. Additionally, though hydrocarbon resources are drawing the most attention today, other resources, including metallic minerals, biological material, and tourism, could turn out to be equally important.

The difficult environmental conditions in the Arctic Ocean logically make resource extraction more difficult than in more temperate climates. Two limiting factors in resource extraction activities thus become even more relevant in such a difficult environment. First, the capital investment required to obtain the technology necessary for extraction may be too high to

17 economically extract the resource (Upson 2006, p. 15). Related to this, the rate at which resources can be extracted with available technology, rather than the absolute quantity of resources that exist, will ultimately determine the viability of that enterprise (Ash 1994, p. 21). To take one example that has parallels for resource extraction in the Arctic, the coal reserves of Antarctica are thought to be well in excess of 100 billion metric tons (Berkman 2002, p.

190). However, the technology to extract those enormous coal reserves in that harsh environment at a rate fast enough to justify the capital expenditure required does not yet exist (Kearney 1992).

With that caveat in mind, the current excitement surrounding the economic potential there has drawn valuable attention to important environmental, political, and security concerns in the Arctic Ocean. With a desire for Arctic

Ocean governance under UNCLOS III is established in theory, the question then turns to whether the Arctic Ocean can be managed in practice. The current interest in the resources of the Arctic Ocean can be leveraged to force various stakeholders, be they nation-states, NGOs, or commercial entities, to construct a practical governance arrangement regarding the sustainable use of the Arctic Ocean. To a large extent, this will depend on the availability of resources there, the ability to economically exploit them, and the capability of governments to regulate that exploitation so that it occurs in a sustainable manner.

Hydrocarbon Resources

Given the current links between hydrocarbon resources, global warming, and energy security, the prospect of finding huge reserves of oil and natural gas in the Arctic Ocean has been the subject of intense speculation and controversy.

Of the many oil companies that have expressed interest in Arctic Ocean hydrocarbon resources, the Arctic Oil and Gas Corporation appears to be the

18 farthest ahead in considering such issues. The company, incorporated in the

United States, filed a highly controversial claim on 9 May, 2006 for the exclusive rights to develop fossil fuel resources in the Arctic Ocean commons area with the United Nations and the five Arctic claimant nations (Arctic

2008).

The United States Geologic Survey (USGS) is currently completing work on a comprehensive, though broad, resource assessment of potential fossil fuel deposits north of the Arctic Circle. However, numerous news sources have already quoted a figure, purportedly from the USGS, that 25% of the remaining undiscovered reserves of hydrocarbons may be in the Arctic Ocean

(Struck 2007). However, this attribution has turned out to be false and has only added to the build-up surrounding mineral resources in the Arctic

Ocean. According to a USGS spokesperson, this figure has never been quoted by the USGS and includes large areas surrounding the Arctic Ocean but not in it (Bailey). Likewise, the Russian Ministry of Natural Resources claims that the Russian claimed areas of the Arctic that were submitted to the CLCS may contain up to 586 billion barrels of oil (Borgerson 2008). Once again, these claims are unproven but have contributed to the excitement and general sentiment that the Arctic Ocean is a rich prise to be claimed as quickly as possible. The misquotes by the USGS and unproven speculation have been quoted as true by the Arctic Oil and Gas Corporation in their required public filings, further bolstering the false sense of enormous hydrocarbon resources lying under the Arctic Ocean commons (Arctic…Potential Resources 2008).

While it is true that there are large proven reserves of these resources in the

Arctic Ocean, the majority of these are located in the continental shelves

(EEZs) of the five Arctic claimant nations, as noted in Figure 4. While there may be substantial hydrocarbon reserves in the Arctic Ocean commons, this

19 has not yet been proven (Arctic Ocean 2006). Furthermore, the reduction in sea ice that is occurring does not necessarily make the extraction of any of the aforementioned resources easier. In some cases, a summer sea ice reduction in the Arctic Ocean will actually make the extraction of these resources more technically challenging since there will not be a solid foundation of ice to build structures on, which is the preferred method for drilling in such places

(Ekelund 1980, p. 169).

Figure 4: Map showing current and potential future resource exploitation in the arctic region (Rekacewicz 2005).

The technology needed to extract hydrocarbons from ice covered deep seabed areas, utilising ice breaking marine vessels and platform drilling equipment, is already in development through Arctic Oil and Gas (Arctic…Expects, 2008).

20 In addition, the oil majors have begun investing in such technology and have been bidding for drilling rights, such as the recent Shell Oil bid for exploration rights in the Chukchi area off the coast of Alaska (Bailey 2008).

However, significant technical obstacles still exist and it remains to be seen whether deep-ocean drilling in an ice covered environment will be technically possible or economically viable.

One can reasonable infer from a survey of current drilling technology that any prospecting for hydrocarbons in ice covered waters, whether on the continental shelf or in the deep seabed, will require at least semi-permanent installations (Ekelund 1980, p. 169). Considering this feature of the hydrocarbon extraction industry, governance and regulation is likely to require fewer resources than extractive industries such as fishing or poly- metallic nodule mining that utilise moving installations. For the hydrocarbon industry, regulation is likely to focus on the application permits for exploration blocks and the various geopolitical factors that accompany this.

In addition, regulation of pollution during operation will be facilitated by the relative ease of installing inspectors and on site monitoring equipment on fixed as opposed to moving platforms.

However, the technology available to detect and contain hydrocarbon spills once they occur in sea ice is not yet mature. Although improved methods for these activities are currently being actively researched, they are not yet mature technologies (U.S. Army 2006). In general, mitigation and clean-up of spills is far more challenging in the cold Arctic Ocean waters due to the low rate of evaporation and the difficulty of ignition (Dickins 1999, p. 176). Such activities are even more difficult in areas of broken ice, as opposed to stretches of open water or solid pack ice (Dickins 1999, p. 187).

21 Metallic Mineral Resources

While significant investment has been made by both national governments and international mining consortia (Lodge 2001, p. 8), the mining of metallic resources from the sea-bed has not been consistently commercially profitable

(International 2004, p. 71) and is expected to remain that way until at least

2025 (Ravikumar 2000, p. 41). However, marine mineral resources can be brought to commercial viability in the future from both a combination of commodity price increases and technological advances to make once marginal resources viable (Antrim 2005, p. 1).

Although there remains much speculation and comparatively little data as to the extent of these resources in the Arctic Ocean, both the deep ocean seabed and mid-ocean ridges are likely places to find such resources (Murton 2000, p.

281 – 306). Thus, both the EEZs of claimant nations and the Arctic Ocean commons, which includes both abyssal plains and ridges such as the currently disputed Lomonosov Ridge (Cochrane 2006), will be areas of potential mineral prospectivity as the sea ice retreats.

Such mining would be done with mobile marine vessels, making such activity more difficult to regulate than hydrocarbon extraction. However, such vessels are likely to be relatively large and slow. The Glomar Explorer , one of the only deep seabed mining ships to have been built, has an estimated maximum speed of ten knots, making such regulatory measures as detection, pursuit, and inspection relatively easy when compared to smaller and faster fishing vessels that would be more difficult to regulate (Pike 2006). Thus, like the hydrocarbon extraction industry, the primary governance issues for the poly-metallic minerals industry will be the geopolitical division of promising areas and the regulation of the environmental impacts of extraction.

22 Biological Resources

While oil, natural gas, and metallic minerals draw much of the attention to the

Arctic, the biological resources present there may actually prove to be one of the most economically viable and valuable resources in the Arctic Ocean, especially as climbing world demand for marine protein combined with overfishing of the oceans increases the importance of food security (Pauly

2005, p. 5). 8 The restrictions on fish catches imposed by the UN Fish Stocks

Agreement in order to sustainably manage those marine resources may further increase interest in polar fisheries (Ash 1994, p. 18).

Historic data on the size of Arctic Ocean fish catches is incomplete, with data from the United Nations Food and Agriculture Organisation missing or exhibiting only partial coverage from 1954 through 2008 (FIGIS).

Nevertheless, reasonable conclusions can be drawn based on a combination of data from similar environments and the primary biologic productivity of the

Arctic Ocean.

Unlike marine mineral resources, biological resource extraction has a long history in both the Arctic Ocean margins and the Southern Ocean. Thus, appropriate parallels can be drawn. The history of both of these areas suggests that significant biological reserves exist. While Southern Ocean fisheries have proved productive in the past, their economic viability has traditionally suffered due to their great distance from world population centres (Ash 1994, p. 19). Nevertheless, the Southern Ocean remains a small

8 Most of the growth in demand for biological resources has come from developing nations, notably China, which accounts for 71% of the recent growth in demand (World Review 2004, p. 6). This trend underlies the potential importance of Arctic Ocean economic activity for nations other than the Arctic claimant nations.

23 but economically important fishery, with 129,000 tons of marine life harvested there in 2006 (FISIS). 9 However, the Arctic Ocean, which has similar environmental conditions to the Southern Ocean, is considerably closer than the Southern Ocean to the population centres of Europe, North, American, and China, making its marine life resources far more economically valuable.

In order to estimate the future production of Arctic Ocean fisheries, data on the primary production of marine life can be used. 10 For the Arctic Ocean, primary production is generally low (11 g C/m 2) due to the attenuating effect of sea ice on sunlight (Arctic Council 2005, p. 493). However, the Arctic

Ocean margins contain areas of primary production that match those of more temperate oceans (greater than 200 g C/m 2) (Arctic Council 2005, p. 493).

Both the future productivity and composition of Arctic Ocean fisheries are likely to change due to a reduction in both the mean water temperature and the sea ice extent. While the effects of these changes on the marine biota in the Arctic Ocean are currently unclear, it is reasonable to assume that as the physical oceanography changes the biological oceanography will change as well. These changes are likely to occur due to increased pressure from invasive species as well as the increased availability of nutrients and light as the sea ice coverage is reduced. It can be reasonably inferred that the increase in areas of open water will increase the primary production and hence the levels of commercially harvestable marine species (Arctic Council 2005, p.

770). However, the overall effects of climate change on the constituents of the

9 For comparison purposes, approximately 2,000,000 tons of marine life was harvested from the Meditarranean Sea in 2006 (FISIS).

10 Primary production refers to the fixing of carbon by marine life (primarily plankton) and is measured in [g Carbon/m 2] (Arctic Council 2005, p. 493).

24 Arctic Ocean ecosystem due to changes in the niche environment and invasive species are as yet unknown (Gradinger 1995, p. 283).

The thesis The Policing of Biomarine Resources in the Southern Ocean provides an excellent overview of the balance between technology for extraction and regulation (Ash 1994). In general, the fisherman possesses many ways to circumvent policies designed to regulate his activity, while the technologies needed for enforcement are imperfect and expensive (Ash 1994, p. 75).

Current problems in the Barents Sea foreshadow the magnitude of the problem facing Arctic Ocean governance, as Norway estimates that more than

100,000 tons of cod 11 was illegally fished from the Barents sea in 2005 (Illegal

2008).

Shipping Lanes and Tourism

Unlike mineral and biological resources, transportation links and tourism are a resource whose benefits can more easily be shared among all of mankind without the need for an elaborate international framework. The existence of a viable shipping lane through the Northwest Passage could result in significant economic benefits by reducing the voyage from Asia to ports on the Atlantic Ocean by 1600 – 3500 nm, with similar benefits derived from the

Northeast Passage (Somanathan 2006, p. 1579).12

The prospects for Arctic Ocean tourism are also increasing; ironically because climate change has made the region more accessible while at the same time increasing the incentive for tourists to see the unique Arctic environment before it is changed forever. Last year, 1.5 million tourists visited the Arctic

11 This illegal catch was worth $360 million (Illegal 2008).

12 The Northwest Passage links the Atlantic and Pacific Oceans via the Canadian Arctic Ocean waters, whilst the Northeast Passage does the same via the Russian Arctic Ocean Waters.

25 region and visits to places like Svalbard have increased at a 6% annual rate

(Naik 2007). As a contrast, the Antarctic region received approximately

15,000 tourist visits in 2002 (Berkman 2002, p. 186). Similar to fishing activities, the geographical proximity of the Arctic Ocean to population centres increases its potential for tourism.

The technology to build ice strengthened ships and a number of rating systems to grade ships on their ability to deal with such environmental conditions have already been developed (Somanathan 2006). As a result, both of these activities are likely to be among the first significant economic activities to occur in the Arctic Ocean and thus must be considered first when implementing a governance regime.

From a regulatory perspective, Arctic Ocean tourism and shipping present similar problems. Such activities generally consist of extended voyages in large vessels. These activities present additional problems because international shipping traffic has the right to transit across national EEZs under UNCLOS III (United 1982). Indeed, this is likely to happen since the national EEZs will be the first areas to open up to such activity (Somanathan

2006). As a result, the potential for international disputes with regards to enforcement of regulations is high.

Three main concerns arise from these economic activities. The first is the maintenance of navigation aids, ice patrols, and safety regulation enforcement in order to provide safe passage for vessels. The second governance issue is the regulation of pollution arising from normal operation.

Third, the chance of a catastrophic accident and the subsequent need for rescue operations and cleanup of discharged fuel oil and/or hazardous cargo must be planned for, especially in ice covered waters.

26

Although some precedent exists for international cooperation in the form of the North Atlantic Ice Patrol, which is run by the U.S. Coast Guard and financed by other nations (Pritchett 1997), such activities are likely to be more difficult in the Arctic Ocean environment.

Conclusions on the Economic Exploitation of the Arctic Ocean

Overall, the Arctic Ocean remains an area of great promise for future economic exploitation. However, it is imperative to note that the first resources to become economically viable will be those in the EEZs of the claimant nations, while any resources that are proven to exist in the Arctic

Ocean commons will take decades before they are accessible and economically viable. The difficult Arctic environment will pose a challenge to both the economic exploitation and the regulation of that exploitation.

Chapter 4: Governance in the Arctic Ocean

The Common Heritage of Mankind

Regardless of the veracity of the claims of vast oil, natural gas, and metallic mineral resources under the Arctic Ocean ice, the concern that such resources might exist can be leveraged to facilitate a peaceful international governance solution under the auspices of UNCLOS III for the Arctic Ocean and particularly the disputed Arctic Ocean commons. Nations will have motivation to implement practical international governance so as not to be left out of any future economic, political, or security benefits emanating from the

Arctic Ocean commons.

Several excellent historical examples exist where nations were motivated to sign an international agreement preserving an area of the earth for peaceful purposes so as not to be left out of the potential future benefits of that area.

27 The Antarctic Treaty System (ATS), while initially signed in 1961, remained an agreement between a few select nations until the oil embargo of 1973 and the subsequent discovery of potential oil deposits in Antarctica caused a massive influx of nations willing to sign the Antarctic Treaty in order to have a voice in future issues on a continent that had suddenly become relevant

(Berkman 2002, p. 70). Likewise, and of direct relevance to the Arctic, the motivation for the international community of nations to convene the convention that ultimately resulted in UNCLOS III was provided in large part by a speech by the Maltese Foreign Minister Arvid Pardo in 1967 concerning the potential for deep seabed mining, as well as a growing fear that a few technologically advanced nations would come to dominate the deep sea if no international agreement was put into place (Charney 1982, p. 83).

Arctic Governance Parallels with the Antarctic Treaty System

One should be careful about drawing casual parallels between the ATS and any potential Arctic Ocean treaty. The two polar regions of the earth differ in fundamental ways, not least of which is that the Arctic consists of primarily of open ocean while the Antarctic is largely terrestrial. The most important difference between the two regions is that fact that the Arctic Ocean is surrounded by developed countries with a large interest in the economic and security implications of any potential arctic governance regime. In contrast, the Antarctic Continent is relatively free from such considerations. From a geopolitical standpoint, the Arctic Ocean more closely resembles the

Mediterranean Sea rather than the Antarctic continent.

With that caveat in mind, there are striking parallels between the renewed interest in Antarctic resources in 1973 and the current focus on potential

Arctic Ocean resources in 2008. From 1961 – 1973, the membership in the ATS increased at the rate of one nation every two years. However, the twin events

28 of the Arab oil embargo, which made nations much more cognizant of their fragile fossil fuel security, and the discovery of potential petroleum deposits in the Antarctic caused participation in the ATS to spike as nations feared that they would be left out of any Antarctic resource extraction (Berkman 2002, p.

72).

Figure 5 shows this increase in the membership of the ATS as a result of these events. The net effect of turning the ATS into a broad based multilateral treaty was a drive to turn Antarctica into an area that would be preserved for the ‘common heritage of mankind’. Eventually, this resulted in the signing of the Convention on the Regulation of Antarctic Mineral Resources (CRAMRA) that prohibited all exploitation of mineral resources in the Antarctic for 50 years in order to avoid confrontation between nations (Berkman 2002, p. 74,

193). This agreement was made possible in part by the fact that the mineral resources of Antarctica will not be economically viable for the foreseeable future (Kearney 1992). As such, CRAMRA represents a precedent for international agreement on the regulation of resources in the Arctic Ocean commons that will not be viable until approximately 2050.

29

Figure 5: Plot of the number of nations that are parties to the Antarctic

Treaty System vs. time (Berkman 2002, p. 72).

A similar sequence of events to those that occurred after 1973 in the Antarctic is now occurring in the Arctic Ocean. As noted earlier, the furore surrounding potential fossil fuel resources has been partially set off by both intense speculation and a misquotation of a USGS report. The same sequence of events also occurred in 1973-1974, when the Wall Street Journal misinterpreted an internal USGS memo that said that the Antarctic could potentially contain 45 billion barrels of oil and 115 trillion feet of natural gas

(Spivak 1974). The Wall Street Journal’s article incorrectly stated that those highly speculative figures represented the recoverable reserves to be found in

Antarctica (Berkman 2002, p. 190).

In addition, the high price of hydrocarbon fuels in 2008 mirrors the high prices that occurred during the Arab oil embargo of 1973. 13 If the price of

13 As of May 2008 oil prices have surpassed the previous inflation adjusted peak set in April

1980 of $103.76 per barrel in 2008 dollars (Moawad 2008).

30 hydrocarbon fuels remains high, this will only serve to increase international interest in areas of the world that may have undiscovered deposits. The

Arctic Ocean commons have especially begun to draw attention because of their current status as international space whose economic wealth could be open for exploitation by a number of national interests.

The wild speculation about potential Antarctic resources helped foment interest in the Antarctic Continent and thus to launch the ‘international accommodation phase’ of the ATS shown in Figure 5. Likewise, the increased interest in the Arctic Ocean commons for the above reasons will draw more nations into the governance debate. Already, the European Union (EU) has identified the Arctic Ocean as a key strategic region for its future ability to secure trade and resources and has ordered the formation of an EU Arctic policy in order to ensure that its interests are represented in the Arctic

(Climate 2008).

National Claims to the Arctic Commons under UNCLOS III

Given the vast area of the Arctic Ocean beyond the EEZs that will potentially be designated as the ‘common heritage of mankind’, the Ilulissat Declaration of the Arctic claimant nations to govern the Arctic Ocean under UNCLOS III takes on increased importance. The fact that the nations detailed in Table 1 have submitted seabed claims to UNCLOS III further strengthens the legitimacy of the treaty and thus makes it more likely that any Arctic Ocean governance framework will be based on those principles.

Considering these claims, the evolution of Arctic Ocean governance will logically follow one of three scenarios. In the first scenario, some or all of the aforementioned claims are accepted by UNCLOS III and the majority of the

Arctic Ocean commons will be placed under the national control of the

31 claimant nations. In this scenario, the legitimacy of UNCLOS III will be permanently weakened since the concept of ‘the common heritage of mankind’ ingrained in UNCLOS III will have been shown to carry no meaning in reality.

A second scenario could also form where the arctic claimant nations’ claims are rejected by the CLCS, but the arctic claimants choose to ignore the ruling and seize the claimed territory anyway. If this comes to pass, some combination of national governance or anarchy would be established for the

Arctic Commons. In all likelihood, UNCLOS III would completely fall apart as an international agreement.

In the third scenario, the claims in Table 1 will be unanimously rejected and the claimant nations will acquiesce to the principle of res communis espoused for the areas of the sea that are the common heritage of mankind in Section XI of UNCLOS III (United Nations 1982). In this scenario, the principle of international territory belonging to ‘the common heritage of mankind’ will be strengthened and UNCLOS III will be legitimised.

The speed at which serious discussions about the Arctic Ocean commons governance begin to take place between the Arctic claimant nations and the

U.N. will have an immense impact on the likelihood of instituting a peaceful international governance regime. Specifically, as Thomas Franck notes in

Fairness in the International Legal and Institutional System, any system of governance originating from the principles of res communis and the fair distribution of resources will have a much greater chance of success if the resources in question have not already begun to have been exploited (Franck

1994, p. 397). The ten year time limit that UNCLOS III places on the submission of seabed claims provides a natural time frame for the start of a

32 framework for practical Arctic Ocean commons governance. Indeed, the deadline for many of the Arctic claimant nations to submit claims, excluding the United States which has not yet signed UNCLOS III, is fast approaching. 14

UNCLOS III as a Test

In theory, UNCLOS III represents a perfect starting point for a framework of international governance in the Arctic Ocean. However, the results of global climate change in the Arctic will also likely prove to be the first real test of

UNCLOS III, specifically the principles of res communis that are detailed in

Section XI (United Nations 1982). All nations party to the UNCLOS III agreement agreed in principle that:

The States Parties to this Convention…Desiring by this

Convention to develop the principles embodied in resolution

2749 (XXV) of 17 December 1970 in which the General

Assembly of the United Nations solemnly declared inter alia

that the area of the seabed and ocean floor and the subsoil

thereof, beyond the limits of national jurisdiction, as well as

its resources, are the common heritage of mankind, the

exploration and exploitation of which shall be carried out for

the benefit of mankind as a whole, irrespective of the

geographical location of States…(United Nations 1982)

Despite this lofty declaration, the coastal states managed to negotiate for overly vague and large definitions of their EEZs. The EEZs of coastal states extend at least 200 nm from the coast and any territorial islands, with the

14 Deadlines to submit claims to the CLCS (DD/MM/YYYY): Russia - 12/03/2007, Canada –

07/11/2013, Norway – 24/06/2006, Denmark – 16/11/2014 (United Nations…Status 2008)

33 possibility of an EEZ extending up to 350 nm or 100 nm past the 2500 meter isobath if certain conditions on the geology of undersea features are judged to be extensions of the continental shelf in question (United Nations 1982). At the time, this framework placed all currently economically exploitable ocean resources 15 in the EEZs of nations with costal territory. This, plus a design for a scheme that made it extremely unlikely to be commercially worthwhile to develop resources in the ocean commons to benefit all of mankind, was a concerted effort on the part of costal nations who saw a chance to turn the

UNCLOS III negotiations to their advantage (Franck 1994, p. 397).

However, it is likely that the resources in the Arctic Ocean were overlooked during the UNCLOS III negotiations. Indeed, a search of the literature reveals that the Arctic Ocean is not substantially mentioned in either the treaty text or any of the documents or memoirs produced concerning the negotiations.

Since the negotiations took place from 1973 – 1982, the concept of global climate change had not yet entered into policy makers calculations. Thus, the reduction of sea ice in the Arctic Ocean that may yield significant exploitable resources in the Arctic commons is a scenario that was likely never envisioned by the UNCLOS III negotiators. The Arctic Ocean will be the first test of both the ‘common heritage of mankind’ principle that was enshrined in

UNCLOS III but has never been put into practice and the practical implementation of such governance.

15 High seas ocean fisheries are the one exception to this but are dealt with in the UN Fish

Stocks Agreement (United Nations Status 2008).

34 Governance Scenarios Coupled with the Environmental State

Change

Somewhat paradoxically, the establishment of a robust international governance regime depends on both a low demand for current Arctic resources as well as anticipated high future demand for those same resources.

More specifically, the rate at which global climate change occurs will have a considerable effect on the system of governance that is eventually formed in the Arctic Ocean commons. If the Arctic Ocean sea ice is reduced enough to allow significant economic activity before effective governance can be put into place, then the chances of effective governance ever forming are greatly reduced.

The May 2008 listing of the polar bear as a ‘threatened’ species illustrates both the ability and the limits that environmental threats have to motivate governmental action (U.S. Lists 2008). While the environmental degradation in the Arctic was enough to convince the United States to take action to help the polar bear, Dirk Kempthorne, the U.S. Secretary of the Interior, explicitly stated that the listing would do nothing to force action on climate change or to harm the economy of the United States (U.S. Lists 2008). As this episode illustrates, environmental degradation is much more likely to stimulate corrective action on the part of governments when that degradation threatens the economic interests of that government.

The Svalbard Treaty as a Precedent for Practical Implementation of Arctic Ocean Governance

While UNCLOS III is the obvious starting point for developing a practical international system of Arctic Ocean governance, the Spitsbergen treaty system already in existence provides precedence and a solid foundation for

35 such a system, while also giving warning to the difficulties that may be encountered upon implementation.

The Spitsbergen Treaty of 1920 16 governs the Svalbard archipelago in the

Arctic Ocean. Under the treaty, Norway has sovereignty over the Svalbard archipelago, but other nations have the right to conduct economic activity there. Norway also has the right to establish fair and non-prejudicial regulations governing this economic activity. So far, 40 countries are party to the Spitsbergen Treaty (Westing 1986, p. 211 – 215).

The right of any treaty member to conduct economic activity and to extract resources from the Svalbard archipelago, while historically uncontroversial when concerned with the land area of Svalbard, has caused arguably the first significant Arctic Ocean territorial dispute. Figure 6 shows the territorial dispute between Russia and Norway, overlaid with the suspected hydrocarbon deposits that are at stake in the dispute. Even the U.S. and the

U.K., Norway’s close allies, are reserving the right to contest Norway’s claim of sovereignty over their EEZ around Svalbard (Pedersen 2006, p. 339).

16 Also known as the Svalbard Treaty.

36

Figure 6: Map of suspected oil and gas deposits overlaid with the current territorial dispute between Norway and Russia in the Barents Sea region

(Rekacewicz 1998).

In addition, the fishing grounds around Svalbard, which Norway has traditionally claimed and regulated but allowed other nations to use, have been the scene of recent national disputes between Norway and both Iceland and Russia (Pedersen 2006, p. 346). Icelandic fishing vessels have even fired on Norwegian enforcement authorities, while the Russian Government threatened to have Norwegian Coast Guard vessels destroyed if they interfered in Russian fishing activities and backed up these claims by deploying patrol vessels with their fishing fleet (Pedersen 2006, p. 346 – 347).

37 This regulatory clash has not yet spread to the valuable petroleum deposits around Svalbard that are now becoming accessible, which due to their non- renewable nature are likely to be even more contentious than fishing rights

(Pedersen 2006, p. 351). At the centre of the dispute are Norway’s sovereign rights supposedly granted to it under both UNCLOS III and the Spitsbergen

Treaty. Svalbard thus serves as evidence that the success in implementing a practical and sustainable governance regime for the Arctic Ocean under

UNCLOS III is by no means a foregone conclusion and will be determined largely by considerations of economic exploitation and the policies implemented to regulate that activity.

Chapter 5: Arctic Governance Scenarios

The Arctic Ocean from a Global Perspective

The scenario framework constructed by the Arctic Council and the Global

Business Network examines the permutations of demand for Arctic Ocean resources and the governance structure there from a global perspective

(Global 2008). This scenario framework is show in Figure 7.

38

Figure 7: Scenario from the Global Business Network and the Arctic

Council’s Protection of the Arctic Marine Environment Working Group

(Global 2008).

The scenario shown in Figure 7 attempts to determine how global events such as the world economic outlook and the stability of national governments will impact the Arctic.

A Governance vs. Economic Exploitation Scenario

In contrast, the scenario analysis conducted focuses more narrowly on the ability to economically exploit the Arctic Ocean vs. the ability to regulate that activity. In doing so, a narrower set of scenarios and scenario triggers can be examined. This focus will also assist in developing specific policies to direct the future of Arctic Ocean governance in the desired direction of a strong international framework.

A future Arctic Ocean that is either found to contain negligible resources or suffers drastically less warming than is currently predicted would be more

39 amenable to peaceful and sustainable governance simply because there would be much less incentive to conduct economic activity there, regardless of the ability to effectively govern or to extract resources. For the purposes of this scenario, the current predictions about the effect of global climate change in the Arctic Ocean, seen in Figure 2 and Figure 3, are assumed to be accurate.

Additionally, the world demand for resources is assumed to remain high, as is assumed in the ‘Arctic Race’ and ‘Arctic Saga’ scenario narratives of the

Global Business Network report seen in Figure 7 (Global 2008, p. 5).

Moreover, while the estimation of Arctic Ocean resources, especially hydrocarbon resources, has likely been inflated by hyperbole, this scenario analysis assumes that an Arctic Ocean transformed by global climate change will contain significant economic opportunities in some form.

This scenario posits that Arctic Ocean governance and regulation will be based on UNCLOS III. UNCLOS III already allows for the creation and enforcement of specific regulations for areas where

particularly severe climatic conditions and the presence of ice

covering such areas for most of the year create obstructions or

exceptional hazards to navigation, and pollution of the marine

environment could cause major harm to or irreversible

disturbance of the ecological balance. Such laws and regulations

shall have due regard to navigation and the protection and

preservation of the marine environment based on the best

available scientific evidence (UNCLOS 1982, p. 115 – 116).

However, international agreements tend to have weak enforcement mechanisms and thus tend to rely upon the willingness of the members of those agreements to practice self enforcement (Simmons 1998, p. 76). While it

40 may be in the long term interests of governments to comply with such agreements, it is often in their short term interests not to (Pedersen 2006, p.

340). Taking the aforementioned assumptions into account, both the UN Fish

Stocks Agreement and UNCLOS III will need to be enforced in practice in order to exercise effective governance.

Scenario Analysis

This study does not seek to determine whether or not sustainable Arctic

Ocean governance is possible. The issues to consider are far too complex and uncertain for the scope of this work. Rather, the aim is to bring the issues of the technological viability of economic exploitation and the effectiveness of technology and governance policy to regulate that activity into consideration when considering governance issues.

As already noted, the surveillance and policing of economic activity in the open ocean is both difficult and expensive (Ash 1994). Due to their relatively low cost, remote surveillance and information technology solutions tend to be the first approaches attempted to enforcing regulatory regimes (Ash 1994, p.

76). Advances in these technologies are likely to continue into the future, since the technology that can be used to regulate sparse human activity over a large region such as the Arctic Ocean is also the technology that governments are investing heavily in to combat newly emerging security threats that tend to be both sporadic and diffuse. However, experience shows that governance regimes that utilise only those methods have been largely ineffective due to the ease with which such measures can be circumvented (Ash 1994 p. 76).

Thus, Arctic Ocean governance will require both new technologies and effective policy implementation.

41 On the subject of resource extraction, new technologies will tend to make once marginal resources economically viable over time, as has been demonstrated in this study. The question remains as to the time frame that Arctic Ocean resources, especially those that may exist on the deep seabed of the Arctic

Ocean commons, will ever be economically extractable.

A combination of the two factors discussed above produces a set of axes on which to construct the scenario framework for the Arctic Ocean seen in Figure

8. The vertical axis measures the technical ability to economically exploit the

Arctic Ocean region. The horizontal axis measures the capability of the governance regime to enforce an effective regulatory policy. Thus, the horizontal axis measures both the technology available for enforcement and the effectiveness of the policies put into place to utilise that technology.

42 Technical Ability for Economic Exploitation HIGH Innovation Arctic Managed Arctic The inability of national and A high ability of national and international governments to international governments to regulate regulate economic activity, economic activity, combined with the combined with a high prospect of ability to extract significant resources, extraction, leads to a scenario leads to the exploitation of Arctic where national and business Ocean mineral and biological interests exercise de facto control resources not unlike international over large swaths of resources and activity in the North Sea today. Capability toPolicy

territory. Pollution and poaching of Environmental damage is limited due and Technical resources is lightly policed. to high regulatory capabilities. Govern

LOW HIGH

Tourism Park Arctic Wildlife Refuge Arctic A low ability of national and A high ability of governments to international governments to regulate economic activity, combined regulate economic activity with with a relatively low prospect of fewer economically viable resource significant extraction, leads resources leads to an Arctic Ocean to the preservation of the Arctic dominated by tourism and shipping Ocean on similar grounds to the concerns, combined with low Alaskan National Wildlife Refuge. regulation of their environmental Tourism and shipping exist but are harm. lightly regulated LOW

Figure 8: Scenario space describing four different scenarios based on a combination of the technical capability of national and extra-national bodies to govern the Arctic Ocean and the technical capability to extract Arctic

Ocean resources. Inspiration for this scenario was derived from the Global Business Network report titled The Future of Arctic Marine Navigation in

Mid-Century (Global 2008).

The four scenarios are constructed by considering the future technical capability for governance and regulation as either high or low. If the ability to enforce those agreements in practice is high, then the Arctic Ocean can be managed sustainably from environmental, economic, and geo-political perspectives. If the ability to manage economic activity is low, then the human impact on the Arctic Ocean will be determined to a much greater

43 extent by the technical viability of the various resource extraction activities to be conducted there.

Likewise, the future technical ability to economically exploit the Arctic Ocean is either considered to be high or low. If the technical ability is low, than future economic activity in the Arctic is likely to be dominated by tourism and shipping concerns, since the technology to build ice-strengthened Arctic class ships is already proven (Somanathan 2006). Conversely, if the technology for significant biological and mineral resource extraction proves to be economically viable before the ability to govern that activity is developed, then the Arctic Ocean will become an area of significant unregulated human activity.

In the ‘Tourism Park Arctic’, the technology to economically extract resources from the Arctic Ocean Environment does not exist. In addition, governance in the Arctic is ineffective due to a combination of lack of resources, appropriate technology, and intelligent policies. In this world, the main human presence in the Arctic Ocean is due to tourism and shipping, along with some fishing.

This relative lack of economic activity would also reduce the incentives for governments to invest heavily in effective governance. With less human activity in the Arctic Ocean, environmental damage will be limited, though the extent to which tourism and shipping cause damage will depend on the ability to regulate those activities.

Conversely, in the ‘Wildlife Refuge Arctic’, the governance of both the national and international spaces of the Arctic Ocean is effective, while the technology for resource extraction does not exist. Such a scenario could be triggered by increased global awareness of environmental concerns, which would put pressure on governments to responsibly manage the Arctic. In this

44 scenario, tourism, shipping, and fishing are once again the biggest economic activities in the Arctic Ocean, but they are highly regulated under the

UNCLOS III provisions.

In the ‘Managed Arctic’ scenario, the technology to exploit Arctic Ocean resources is developed in coincidence with the practical ability to govern the

Arctic Ocean. In this scenario, which might be viewed as the best of both worlds, significant economic benefit is derived from Arctic Ocean minerals, biological resources, shipping, and tourism, all effectively managed under

UNCLOS III. However, given the precedent set by the Svalbard disputes, this scenario must be viewed as unlikely.

The ‘Innovation Arctic’ world postulates that the ability to economically exploit the Arctic Ocean will be far ahead of the ability to regulate that activity in the future. For international business concerns, this scenario would likely represent a world of great opportunity in the Arctic without the constraint of regulations. Other stakeholders, notably NGOs and government organisations, would view this world as a ‘Wild West Arctic’, where unregulated economic activity leads to devastating ecological damage. In this state of affairs, security concerns will also become a factor as nations compete over perceived violations of sovereignty. These violations of sovereignty will include not only incursions into territory but also pollution effects from economic activity.

Both the ‘Innovation Arctic’ and ‘Managed Arctic’ scenarios would likely be triggered by rapid technological advancements in Arctic Ocean environment extraction technology, with the difference between the two delineated by the timescale of such advancement in comparison to the timescale of the implementation of effective governance. With all four scenarios, the outcome

45 will likely be highly dependent on the timeline of events. If a stable governance regime is in place before significant economic activity, then the chances of a sustainably governed Arctic Ocean increase. Conversely, if outstanding governance issues are not resolved before interest in economic interest increases, as the Svalbard case, then the chance of implementing a practical governance regime that is accepted by all stakeholders is decreased.

In all likelihood, the future of the Arctic Ocean will incorporate some combination of the scenarios outlined here. If one takes the reasonable view that the Arctic Ocean should be sustainably managed, then a scenario with strong governance is preferable. Likewise, the known resources of the Arctic

Ocean and the pace of technological development make it likely that economically viable resource extraction will occur to some degree. With this in mind, the requirement to quickly form an effective governance regime in the Arctic Ocean becomes even more imperative.

Wild Cards

It is also important to note that several ‘wild card’ events could have a drastic impact on whether or not sustainable governance in the Arctic Ocean is to be achieved. The first, and most obvious, is a change in the magnitude of warming in the Arctic Ocean. Logically, significantly faster warming than is currently predicted would have the effect of increasing the rush to exploit the resources there but may also increase the sense of responsibility that national and international bodies have towards the global environment. Conversely, much slower warming than is currently predicted would mean that the current furore over economic exploitation and governance of the Arctic Ocean leads nowhere.

46 As noted in the Global Business Network scenario report, global events outside of the Arctic Ocean could also influence the economic interest in the region. For example, a drastic reduction in international trade volumes or a general world economic downturn could reduce national interest in the Arctic

Ocean (Global 2008, p. 6). Likewise, in contravention to the Ilulissat

Agreement, an unexpected national agreement by the Arctic claimant nations to ignore UNCLOS III and divide the Arctic Ocean into sectors would likely serve to drastically increase international tension there.

Chapter 6: Conclusions

Towards an International Governance Regime under UNCLOS III

The Ilulissat Declaration of 28 May 2008 reaffirms the Arctic claimant nations’ commitment to the determination of sovereignty in the Arctic Ocean and the subsequent regulation and governance there under the auspices of UNCLOS

III. However, the question remains as to whether the Arctic Ocean will be largely divided up among the EEZs of the respective Arctic claimant nations or whether the claims outlined in Table 1 will be rejected by the CLCS and a large portion of the central Arctic Ocean will fall under the common heritage of mankind as outlined in Section XI of UNCLOS III.

Despite this promising beginning for international governance, the conventions outlined in UNCLOS III and related documents must be implemented in practice before the effects due to global climate change permit significant economic activity in the Arctic Ocean. Sustainable governance in the Arctic Ocean will depend heavily upon a well enforced regulatory framework due to the fragile nature of that unique environment.

47 Additionally, the time frame of the development of suitable Arctic environment technology to economically exploit the Arctic Ocean will play a large role in determining both the interests of international business and national governments in the region. The race between the technology to economically exploit the Arctic Ocean and the implementation of effective governance will in large part determine the future of the Arctic Ocean.

Future Work

The implementation of the individual elements of governance in the Arctic

Ocean must be studied in depth in order to begin to formulate effective policy for the region. In particular, those issues that will require international coordination, such as Arctic shipping regulations for safety and pollution, must be examined with their international consequences in mind.

Additionally, an updated review of maritime regulation methods and technologies with a focus on the Arctic Ocean environment would provide a useful starting point

The debate about the availability of Arctic Ocean resources also suffers from much speculation and a lack of reliable data. When such data becomes available, it must be combined with existing data sets to determine the size of potential economic activities that global climate change will make possible in the Arctic Ocean. Additionally, a program to document state-of-the-art technologies in development will aid in determining the time frame in which

Arctic Ocean resources will become economically viable. The completion of both of these tasks will aid in ensuring that appropriate governance can be implemented before such activity begins.

Furthermore, accurate mapping, both of the potential resources of the Arctic

Ocean, and of the assorted EEZ extension claims made by the Arctic claimant

48 nations will ensure that potential resource or jurisdictional disputes can be addressed at the earliest possible stage.

49 Definitions

Arctic (Ocean) Commons – The area of the Arctic Ocean outside of the 200 nm economic exclusion zones of the Arctic claimant nations.

Arctic Claimant Nations – Those nations having a possible claim to the Arctic

Ocean. Includes The United States, Denmark/Greenland, Russia, Norway, and Canada.

Arctic Ocean – For the purposes of this study the Arctic Ocean is defined as the collective EEZs of the five arctic claimant nations and the arctic commons area in the middle of this ring. See Figure 1.

Mineral Resources – Resources that include all hydrocarbons as well as all metallic materials.

Res Communis – When applied to UNCLOS III, the concept that those areas of the sea that are not owned by states are owned by all of mankind.

Seabed – The area on the bottom of the ocean, but not including the above water and air column.

Abbreviations and Nomenclature

ATS – Antarctic Treaty System

CLCS – Commission on the Limits of the Continental Shelf

CRAMRA - Convention on the Regulation of Antarctic Mineral Resources

EEZ – Exclusive Economic Zone

EU – European Union m – meter nm – Nautical Mile

UNCLOS III – The United Nations Third Law of the Sea Treaty

USGS – United States Geologic Survey

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