The Polar Silk Road and Arctic Geopolitics

Icelandic President Ólafur Ragnar Grímsson made it clear, “The security of Shanghai in the future will be determined in the Arctic.” Shanghai is the world’s major city most vulnerable to flooding in a warmer planet – the more ice melts, the further sea levels will rise and the more China’s financial capital will be submerged.

China accepts the dangers of climate change and has been a leader in developing environmental technologies that mitigate greenhouse gas emmissions. But at the same time it appears more than willing to use polar routes for trade and lend billions to projects like Yamal in the Russian Arctic which provides 5% of the world’s natural gas but also places new pressures on the pristine and unique Arctic environment.

In contrast the US in the form of State Secretary Pompeo refuses to acknowledge climate change in the Arctic instead viewing the disappearing ice as an opportunity for trade. Even his predecessor Rex Tillerson a former oil executive had signed the Fairbanks Declaration which recognised that the region is warming at twice the global average.  

The unpredecented melting of Arctic ice is a powerful reminder that reality of climate change has arrived. The rapid rise in average tempartures is shocking to behold even for seasoned climate scientists.

The melting ice has allowed ships to traverse between Asia and Europe through Arctic Russia and even potentially via Canada’s Northwest passage more rapidly, saving time and fuel by avoiding traditional routes such as the Suez Canal.

The opening up of this sea route transforms Russia’s geopolitical dynamic – potentially giving it influence over a new key trade route. The presence of more ships in the region and the lack of ice also opens up the possibility of greater economic exploitation in the region, something the US and Russians have openly welcomed. Others like the Norwegians see the damage this would cause to a fragile region relatively untouched by humans until the rapid ice melt and have ruled out Arctic oil drilling.

Ownership of the region is also disputed, Russia put in a claim to the UN to extend its exclusive economic zone across the region. If applied this would extend the other Arctic state’s zones as well, namely the US, Denmark (via Greenland), Norway and Canada. But this extension of territory could also stoke conflict between the states, particularly if new mineral or hydrocarbon deposits are uncovered.

Other countries have also taken a keen interest in Arctic affairs through close proximity, Finland and Iceland are fairly obvious members. Others like the self styled “near-Arctic state” China is indicative of its new global role as a opportunistic power on the lookout for new markets, sea routes and avenues of power to explore.

China has called for Polar or Ice Silk Road and has sent an exploratory ice breaker Xue Long (Snow Dragon) to the region as well as targeting investments in the Arctic such as the Yamal project and the hunt for rare earth minerals in Greenland.  

Every move by China will be carefully monitored by its neighbour Russia who remains friendly with China, but has watched painfully as China supplants it economically and diplomatically across much of the world. Russia will not be happy to see this happen in a region it views as its backyard.

The Arctic region is reckoned to contain massive oil and gas reserves, it is reckoned that there are 44 billion barrels of natural gas and 90 billion barrels of oil as well as many different metal deposits and around 10% of fish stocks, all of this makes it a hugely tempting target for a resource hungry world.

But the harsh conditions even with global warming make exploiting any of it rather expensive. Some analysts put estimate that the price of a barrel of oil would have to hit over US$ 100 to make it worthwhile drilling in the Arctic.

The irony is clear the more climate change melts Arctic ice, the easier it is to exploit the Arctic through mining and drilling, which in turn will accelerate climate breakdown. So while China may well make significant short term investments and geopolitical point scoring, it will also be contributing to the long term demise of its populous coastal cities such as Shanghai.

Instead China and the Arctic Council should focus on developing a more resilient region, better able to withstand the coming ravages of climate breakdown.

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