The Lloyd’s report outlines the multiple risks facing businesses operating or moving into the Arctic, including operational, geo-political, regulatory and reputational risks.
“If something goes wrong in the north it will impact not just one company - but an entire industry. If development is to happen sustainably, all companies have to do this right, and demonstrating this day in and day out,” says Charles Emmerson to BarentsObserver.
Charles Emmerson has authored the report together with Glada Lahn. They both work for Chatham House, a London based world-leading thinktank of independent analysis. The Arctic Risk Report was launched in Norway’s capital Oslo on Thursday. Norway is one of the nations in the driver seat for opening the Arctic for petroleum drilling. Later this summer, seismic surveys will take place all the way to north of 78°N east of Norway’s Svalbard archipelago.
As a result of climate change, the Arctic is becoming ice free for longer periods of the year and this is resulting in more economic activity.
“The Arctic will probably change more in the next ten years than in the last quarter century. We’ve entered an era of discontinuous change,” according to Charles Emmerson. He continues; “There’s still far too much we don’t know about the region - so closing knowledge gaps, establishing baselines and developing specific technologies and practices is key.”
Charles Emmerson is one of the authors of the report. Photo: Jonas Karlsbakk
Estimates presented in the report reads that the Arctic is likely to attract investments of $100 billion (€76 billion) or more over the coming decade. Melting ice cap opens new shipping lanes between the Arctic and booming economies in Asia as well as making the region’s estimated large deposits of petroleum and minerals more accessible.
More accessible resources attract Big Oil and with Big Oil come increased geopolitical interests to the Arctic. The Norwegian government argues that the High North is the single most important part of Norway’s Foreign Policy. Norway is one of the five Arctic coastal states and one of eight members of the Arctic Council. Other European and Asian nations are now knocking on the door, and want observer status to the Arctic Council.
“Arctic politics will likely remain controversial and fluid - domestically and internationally. Who will be in the Arctic Council room a year from now, and what will be their agenda?” asks Charles Emmerson.
The report reads it is highly likely that future economic activity in the Arctic will further disturb ecosystems already stressed by the consequences of climate change.
Such predictions have been raised by environmental NGOs for years. Lloyd’s is the world’s biggest insurance market.