North of the Arctic Circle is a space of emerging economic opportunities due to the prevalence of climate change. The financial opportunities offered by the Arctic have facilitated the basis for tensions in the region, including territorial disputes over resource-rich areas and the re-militarization of the once ‘exceptional’ Arctic. The hypothesis, that Arctic melt is facilitating economic opportunities and tensions in the Arctic region is navigated. The relationship between the economic opportunities that have come to light due to the Arctic melt and Arctic tensions is discussed, followed by the establishment of the increasing necessity for revisions to existing law and order formulated by UNCLOS and a change in the working of the Arctic Council to reestablish ‘Arctic Exceptionalism.’

Introduction 

Climate change is a pressing issue against the existence of humanity in the contemporary world, whose effects extend to other dimensions of society’s functioning. The immediate effects of climate change are evident in Arctic geopolitics through the impact assessed in the domains of Arctic economy, security, and territorial questions. The Arctic has witnessed the accelerating effects of climate change through its melting seas, as suggested by Rantanen et al., during the last 43 years the Arctic has been warming nearly four times faster than the globe (2022, pg. 1). This Arctic melt has instigated international interest in the once inhospitable region. It has become a source of clashing interests for Arctic nations and non-Arctic nations alike. The potential of the Arctic to be ice-free by 2050 as suggested by IPCC (2021, pg. 23), supports the assertion of dominance portrayed by nations. The ice-free Arctic would result in a new area for navigation, establishment of trade routes, resource extraction, industry boost, territorial disputes, militarization efforts, and security issues. The melting Arctic has piqued the interest of 8 countries (Arctic nations) whose land is part of the Arctic Circle, namely, Canada, Russia, Iceland, Norway, Sweden, Finland, the U.S., and Denmark and non-Arctic nations like China. This piqued interest in the Arctic has increased the necessity of explicit international regulations and laws that intend to mitigate the clash of regional and international interests. The hypothesis “The Arctic melt is facilitating economic opportunities and tensions in the Arctic region” will be navigated through the following research questions:

• What are the economic opportunities in the Arctic and how has the Arctic melt facilitated exploiting them? 
• What are the Arctic disputes and militarization accompanied by these economic opportunities? 
• How has the Arctic policy of Arctic nations and non-Arctic nations changed because of economic opportunities and militarization of the Arctic?
• What is the role of the Arctic Council and UNCLOS in this changing landscape?

Literature Review

With its substantial undiscovered oil and natural gas resources, the Arctic region is becoming increasingly accessible due to the Arctic melt, attracting significant interest from countries and oil companies. The potential for ice-free navigation by 2050 and the transformation of global trade routes underscore the region’s economic and strategic importance. Disputes over resource-rich areas like the Lomonosov Ridge point towards growing tensions and growing international interest are highlighted through China’s Arctic endeavours. The renewed great power competition in the Arctic reflects its strategic value, with NATO and Arctic nations responding to Russian and Chinese Arctic activities. (USGS, 2008; 2009), (WEF, 2020), (Mahmoud et al., 2024), (OWP, n.d.), (Government of China, 2018), (CRS, 2021), (Tricontinental, 2023).

Methodology

This research employs a qualitative and descriptive research design. The data utilized to create this article comes from primary and secondary sources with a limited edition of tertiary sources. The sources used are published from 2008 (the year economic opportunities in the Arctic were discovered and published) to 2024 to ensure relevance and updated status for the research article. The credibility of the sources is ensured through the observation of the reputation and experience of the source platforms and authors, respectively.

Arctic Melt and Economic Opportunities

Climate change has facilitated the phenomenon of Arctic melt. According to NASA, Arctic Sea ice is melting because of longer melt seasons in a warming Arctic, which is often referred to as the Arctic melt (2014). The economic significance of the region can be traced from 2008 when a study by the USGS assessed the undiscovered resources in the Arctic and highlighted the abundance of petroleum, oil, and gas in the areas north of the Arctic Circle. The Arctic melt allows the once inaccessible region to be explored and exploited to meet economic gains. In 2023, the Arctic Sea ice loss was accompanied by a thinning Arctic Sea ice cover (NASA, 2023). The melting sea ice has allowed Arctic trade routes like the NSR and the NWP to become increasingly navigable. Scientists at NASA recorded a lower level of ice in the NWP than before in 2023 (2023), which corroborates the increasing navigability of Arctic Sea routes. Increased navigability of Arctic trade routes assures time efficiency, lower fuel costs, and a decrease in carbon footprint, as they decrease the distance covered by trading vessels typically operating via the traditional trade routes of Suez and Panama. WEF (2020, para 10-11) brings to notice the efficiency of Arctic trade routes:

Typically shipping to Japan from Rotterdam would use the Suez Canal and take about 30 days, whereas a route from New York would use the Panama Canal and take about 25 days. But if the Europe-Asia trip used the Northern Sea Route along the northern coast of Russia, the trip would last 18 days and the distance would shrink from ~11,500 nautical miles to ~6,900 nautical miles. For the U.S.-Asia trip through the Northwest Passage, it would take 21 days, rather than 25.

Article 234 of the UNCLOS (1982) gives littoral Arctic nations the regulatory rights to govern maritime traffic in their adjacent Arctic trade route, providing the area retains its ice sheet for most of the year. Article 234 has provisioned nations to utilize the trade routes for their economic gains and vessel taxes. A changing Arctic, however, hinders the utilization of these routes by littoral Arctic nations as sea ice declines, leaving the latter part of Article 234 (condition of the ice sheet) unmet and according to Brown, arouses international interest (2018). The changing Arctic landscape and the economic opportunities prevalent in the region have enticed nations to contest their national interests (Pirot, 2019) through Arctic territorial claim registrations at CLCS and militarization of the region.

• Territorial Disputes

The areas of dispute in the Arctic are the Northwest Passage, Beaufort Sea, and Lomonosov Ridge. Both, OWP and Arctic Review report that the Northwest Passage and the Beaufort Sea have been under dispute between the U.S. and Canada since 1969 and 2004, respectively, with Canada focusing more on the climatic impact of the utilization of these areas and the U.S. focusing on the tempting economic opportunities. Similarly, they report that the Lomonosov Ridge has been under dispute since 2014, with Russia, Canada, and Denmark claiming it to be their continental ridge extension. In 2023, CLCS officially recognized the seabed claim of Russia in the Arctic region which largely overlaps with the claim of Denmark and Canada, especially, of the Lomonosov Ridge and despite the recognition not being final, as Denmark and Canada await review of their claims, it does open paths for Russian demonstration of power in the Arctic (Hager, 2023). It is crucial to understand the resource-rich identity of the Lomonosov Ridge and its association with the overlapping territorial claims.

• Militarization Race

In a melting Arctic, with the concept of national interest in mind, Arctic nations have begun rapid militarization of the region and the growing interest of non-Arctic nations is becoming evident. The Arctic had witnessed extensive militarization during World War II and the Cold War and witnessed de-militarization efforts post-Cold War, which marked the Arctic as an area of ‘Arctic Exceptionalism’ or a ‘zone of peace’ (Gorbachev, 1987; CRS, 2020; Heather Exner-Pirot, 2019). Contemporary times have seen a shift yet again, highlighted by the renewed militarization of the region:

The geopolitical environment for the Arctic has been substantially affected by the renewal of great power competition. Although there continues to be significant international cooperation on Arctic issues, the Arctic is increasingly viewed as an arena for geopolitical competition among the United States, Russia, and China. Russia in recent years has enhanced its military presence and operations in the Arctic. China’s growing activities in the Arctic have become a matter of increasing curiosity or concern among observers (CRS, 2020, p. 2).

Pirot (2019) argues that the great power competition in the Arctic, according to realists, has erupted due to the prevalence of resources and increasingly navigable trade routes while liberals suggest that conflicts in the region are unlikely due to the Arctic nations’ shared interests. The renewal of great power competition in the Arctic is evident through the immediate militarization race in the region. Russia has reopened 50 military bases operational during the Soviet era, including radar stations, air bases, integrated emergency rescue stations, and border outposts, built new air bases like Rogachevo, Nagurskoye, and Temp, along the Northern Sea Route, and emphasized the importance of its Northern Fleet for the Arctic Ocean, GIUK-N Gap, the North Atlantic, and the NSR, while returning to bastion defence, a Cold War tactic (Heather et al., 2020). Russian Arctic strategy till 2035 was amended in 2023, now focusing more on the national interests of Russia, building foreign relations based on bilateralism, and omitting the word ‘good-will’ from subparagraph ‘a’ of paragraph 16 (Davis & Vest, 2020; Changes to, 2023). Russian focus on bilateral relations in the Arctic hints at the growing necessity of extensive collaboration with China in the oil and gas sector, like in 2009 when CNPC loaned $25 billion to Russian oil companies amidst Russian fear of China’s exploration in the Arctic region (Matthews, 2019). Following the Russian invasion of Ukraine in 2022, however, amidst the deteriorating ties between Russia and the West, Russia and China’s collaboration in the Arctic has heightened significantly (Nicholas, 2024). In Arctic affairs, it is important to note the interest of non-Arctic nations like China, in the economic possibilities offered by the Arctic, as it influences the policy of Arctic actors like the US and NATO. According to China’s Arctic Policy (2018), China considers itself a ‘Near-Arctic State,’ one of the states closest to the Arctic Circle, impacted by Arctic climate change and proposed a ‘Polar Silk Road’ to increase connectivity and sustainable development of the Arctic. China’s growing interest in the Arctic can also be seen in contrast with the Malacca dilemma, concerning its energy insecurity (Matthews, 2019). Russia and China’s joint military training in the Bering Sea in 2022, in the Exclusive Economic Zone of the U.S. (Arctic Military Activity Tracker, n.d.), highlighted the increasing presence of China in the region and corroborates the focus of Arctic nations on China in the Arctic. Since this was the first and only joint military training by Russia and another nation from 2020 to 2024, the deteriorating ties between Russia and other Arctic nations and the sustained relationship between Russia and China can be interpreted.

Following Russia’s Arctic military posture and China’s increased involvement in the Arctic, other Arctic actors, like NATO and the U.S., have also emphasized the need to engage in militarization efforts for their interests. The Chair of the NATO Military Committee, Admiral Bauer at the 10th edition of the Arctic Circle Assembly (2023), commented:

The increased competition and militarization in the Arctic region, especially by Russia and China, is concerning…. We cannot be naïve and ignore the potentially nefarious intentions of some actors in the region. We must remain vigilant and prepare for the unexpected.

In 2024, Russia will be the only non-NATO nation in the Arctic, posing a significant challenge to NATO’s defence interests in the region. NATO is focusing heavily on its regional plans under Deterrence and Defense of the Euro-Atlantic Area through the Joint Force Command in Norfolk and in Brunssum, which aim to support NATO’s Arctic operations and defence unity (Bauer, 2023; Heather & Arts, 2023). NATO’s 2030 report emphasized the necessity for the development of deterrence and defence strategies for its areas in Europe, primarily to counter Russia. NATO conducts regular military drills in the Arctic like Cold Response, led by the Norwegian military and NATO allies every two years (Arctic Review, n.d.) and has conducted a total of 18 military exercises in the Arctic from 2020 to 2024, many of which were joint military exercises and drills, inclusive of new NATO members, Finland and Sweden (Arctic Military Activity Tracker, n.d.). The Nordic Defence Cooperation (NORDEFCO), in its 2030 vision, highlights support and contribution to NATO for its collective defense requirements, deterrence and defence ideas, and to help in improving NATO’s stance in Northern Europe. The U.S. has highlighted its interest in developing Arctic security capabilities, in response to Russian advancement in the Arctic and the perceived threat from China, in its Implementation Plan for the National Strategy for the Arctic Region (2023) and National Security Strategy (2022) to deter threats in the Arctic and modernize NORAD in collaboration with Canada, improve icebreaking capacity, maritime awareness, and disaster response capabilities.

International Organizations

International organizations and treaties like UNCLOS, the Arctic Council, UN, BEAC, IMO, OSCE, EU, NATO, CLCS, EEA, Arctic Five, NAFTA, G20, Nordic Council of Ministers, and the Council of the Baltic Sea States address issues concerning the Arctic (Heininen et al., 2020).

• The Arctic Council

The Arctic Council had, since its establishment in 1996, been a collaborative body for the Arctic 8 and acted as a cornerstone in the concept of ‘Arctic Exceptionalism.’ The 2022 Russian invasion of Ukraine impacted the functioning of the Arctic Council as the Arctic 7, on March 3, 2022, jointly declared the suspension of collaboration with Russia in the Arctic Council during Russian rotatory chairmanship (U.S. Department of State, 2022). Norway gained ‘chairship’ in 2023, creating an atmosphere of hope for the renewal of the collaborative functioning of the Arctic Council and Russia’s intent to continue as part of the Arctic Council became clear, given its national interests are upheld (Jonassen, 2023):

So far we do not have any plans to exit the Arctic Council, but if the organization becomes useless or our rights are violated, we could consider leaving. We are strictly guided by our national interests and this will come first, stated Russia’s Arctic Official, Korchunov (2023).

The Norwegian Minister of Foreign Affairs highlighted the foreign ministers’ absence at the 13th Arctic Council meeting and stated:

We will consult with the other members about the work ahead. As of now, Russia can’t be included. Now we can start the work and the conversations with the members about how to proceed. We will focus on projects that do not involve Russia (2023).

The Arctic Council’s current functioning does not exemplify the idea of ‘Arctic Exceptionalism’ as the world recalls. Amidst the instability in contemporary times, it becomes important for the Arctic Council to retain its value as the cornerstone of the ‘zone of peace’ and understand the importance of Russia in the Arctic.

• UNCLOS

CLCS has a pivotal role in resolving the disputes of the Arctic under UNCLOS. It is essential to note that the U.S., a key actor in the Arctic, has not signed or ratified UNCLOS, severely undermining its authority and prompt functioning, which is furthered by the lack of an enforcing body of UNCLOS (Curtis, n.d.). Based on the conflicting views surrounding Article 234 of UNCLOS, the necessity to update the articles of UNCLOS considering the changing landscape of 2024 becomes evident, to mitigate tensions in the Arctic and retain clarity.

Conclusion

North of the Arctic is a resource-rich region with a huge supply of untapped natural resources like oil, gas, and petroleum, which makes it an international point of interest. The Arctic Melt has allowed this once-distant region to be accessible as the sheet of ice guarding these resources is melting away, enticing the interest of companies looking for economic advancement and nations alike. The year-round navigation of Arctic Sea trade routes like NEP, however, despite the Arctic melt, remains an aspect of the future with a 2024 study (Wu et al., 2024) suggesting total navigation possibility only by 2065. The economic prospects of the region have spewed Arctic disputes through overlapping territorial claims made at CLCS, followed by active militarization of the region, accommodated by each Arctic nation’s national interest. Despite the presumed ‘exceptionalism’ of the Arctic, the current militarization, competition, and disharmony in the region, point otherwise. This shift in the ‘exceptional’ Arctic can be traced through the Arctic policy of nations within the Arctic Circle and non-Arctic nations like China. Analyzing the policy of key Arctic actors confirms the presence of an emerging militarization race in the region as they begin focusing on the Arctic to deter potential threats and build Arctic capacity, which consequently points towards the necessity for the improved working of international organizations like the Arctic Council and UNCLOS. The infamous area of ‘exceptionalism’ witnesses challenges in a changing Arctic, both geographically (Arctic Melt) and politically (Russia-Ukraine war), as UNCLOS fails to remain explicit and the functioning and collaborative nature of the Arctic Council is hindered.

It becomes necessary to revise the articles of UNCLOS, specifically Article 234, to meet contemporary challenges like the Arctic Melt, to retain clarity and limit conflict of interest. Key Arctic organizations like the Arctic Council need to focus on their quality of collaboration and look past the ever-changing geopolitical scenarios to reiterate ‘Arctic Exceptionalism’ and ensure the continuity of membership of Russia, as it is the ‘Arctic regional power’ (Sadurski, 2024) and plays a huge role in the Arctic. The necessity of an all-inclusive militarization law that aims to mitigate the militarization race in the Arctic has also become evident to ensure lasting peace in the region.

Title image courtesy: Pixels

Disclaimer: The views and opinions expressed by the author do not necessarily reflect the views of the Government of India and Defence Research and Studies

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