With the U.S. mid-way through its chairmanship of the Arctic Council before Finland takes over, the Carnegie Endowment for International Peace hosted a conversation between two sitting ambassadors, the Honorable Charles Adams of the U.S. and the Honorable Kirsti Kauppi of Finland, as well as Deputy Assistant Secretary of State for Energy Transformation Melanie Nakagawa, for an exploration of U.S. and Finland shared priorities and outlooks on Arctic issues.
David Livingston, Associate in Carnegie’s Energy and Climate Program, moderated the discussion. He said Finland has held an active role in Arctic governance, specifically Arctic environmental governance, and is an important bilateral partner to the U.S.
The Rovaniemi Process laid the foundations for Arctic environmental governance and led eventually to the council’s formation. Finland has consistently played a unique leadership role in setting the bar for Arctic good governance, and ensuring the adoption of rules and guidelines for safe cooperation in the Arctic.
The discussion focused on the transition from U.S. to Finnish chairmanship next year, the role of sustainable development, and about the paradigm shift in the Arctic from a wild frontier to a known area with complex risks and fragilities.
Livingston said that when President Obama and Prime Minister Trudeau earlier reinvigorated the U.S.-Canada relationship, they also elevated U.S.-Canada Arctic bilateral cooperation.
Ambassador Adams said the Arctic has growing salience as an issue of concern.
Following President Obama’s visit to Alaska last year, various federal, state, and local organizations realized they needed greater coordination on Arctic issues, resulting in the formation of the Arctic Executive Steering Committee. The committee has been preparing for the upcoming science ministerial meeting in September.
The AC’s Agreement on Cooperation on Marine Oil Pollution, Preparedness and Response in the Arctic went into effect on March 25, 2016. Several exercises have been planned to rehearse in real time member state responses to spills and emergencies.
Additionally, the first search and rescue response exercise will be held this summer in the Bering Sea. In May 2017, the next full ministerial meeting will be held in Fairbanks, marking the end of U.S. chairmanship and the beginning of the Finnish chairmanship.
Adams said the changeover has specific ramifications for the U.S. embassy in Helsinki in the coming months. Finland is the global leader in icebreaker construction and is interested in the U.S. need for new icebreakers. Interesting opportunities exist for commercial collaboration between Finnish shipbuilding enterprises and American shipbuilding yards and icebreaker operators.
Ambassador Kauppi described a number of high level principles and the political dynamics that are at work as the council determines its future agenda.
She said the changes in the Arctic function as a climate change accelerator, and that is the reason why the Paris climate agreement and its implementation was such an Arctic governance-related international effort. It will be crucial for all future Arctic policies, challenges, and priorities.
The other sides of the COP21 agreement are mitigation and adaptation. Both will require special and specific measures in the Arctic. Arctic countries will need to show leadership on mitigation, which also must be a global priority. The most acute problem in the Arctic in regard to mitigation is black carbon. In the short term, reducing black carbon emissions will be more critical and cost effective than any mitigation strategy. Science research is important because—in addition to studies of the present situation—projections are needed on future events. Kauppi said this is why Finland is especially happy that the U.S. is focusing on scientific research, and is hosting the ministerial science meeting, which is not limited to the Arctic Council countries.
In regard to scientific research, the University of the Arctic is a network of universities, research institutes, and other organizations that are already functioning, networking, and building collaborative infrastructure and stronger resources for the Arctic research.
Kauppi said the council works in a collaborative fashion and needs to continue in this inclusive basis (i.e. all the Arctic countries need to take part) despite political challenges.
Kauppi said Finnish chairmanship initiatives are still too early to talk about, but Finland is in the process of consulting with the AC member states on program priorities. Finland’s chairmanship program will place a lot of emphasis on continuity. Successive chairmanships have built on previous goals.
Finland places a lot of emphasis on the Arctic’s environmental aspects, while recognizing that a lot of economic activity will occur. Kauppi said issues related to economic activity need to be addressed early, which is why Finland has welcomed the regulatory world and economic council formation, so the economic actors develop a common approach.
Other organizations that work on the Arctic issues include the Barrents Europe Arctic Council, where Arctic regions and nations work together in a very concrete fashion.
The EU’s Northern Dimension also has implemented a lot of concrete projects, which have impacted the Arctic environment.
Nakagawa spoke about her work translating the higher level principles and priorities into action on the ground and sustainable development.
Asked by Livingston about the U.S. government’s approach to Arctic sustainable development, Nakagawa focused on the energy perspective. The U.S. Department of Energy granted $4 million to remote Alaska communities through the energy efficiency challenge and used the Denali Commission to support communities affected by climate change.
Nakagawa said the U.S. is looking forward to working with Finland, a world leader in remote heat and power. Technically recoverable conventional oil and gas resources also can be found north of the Arctic Circle.
At the moment, the U.S. should take advantage of the current “lull” in Arctic oil development activity to consider the crucial role of environmental protection in offshore oil and gas development.
When PM Trudeau visited, “we confirm that …, including shipping and oil and gas exploration and development, should take scientific evidence, traditional, and local knowledge into consideration and should occur only with the highest safety and environmental standards and when in accord with indigenous agreements,” Nakagawa said.
While Arctic energy has traditionally meant fossil fuels, a tremendous amount of renewable energy opportunities are available to be explored today. Canada’s Energy & Resources Bureau has taken the lead in developing renewable energy access. Because many of the more remote Arctic communities rely on diesel combustion, this is a priority. Diesel combustion generates black carbon. While the quantity is low, evidence suggests that these black carbon emissions help speed up Arctic environmental impacts.
The Arctic nations contain thousands of off-grid communities, a potential marked for American businesses interested in selling off-grid energy space. Successful rural community energy projects also depend on local capacity building. To this end, the State Department partnered with Finland, Canada, G’wichin Council International, Iceland, and ACEP to create ARENA.
The State Department also is creating an Arctic Energy Business Plan prize. In keeping with the White House directive to pursue innovative arrangements to engage P3’s and stakeholders, as well as to promote youth engagement in this region, the competition will target youth development of renewable energy opportunities.
Livingston asked about the importance of setting standards for Arctic commercial operations, particularly, oil and gas.
Nakagawa responded that the low price environment has enabled Arctic countries to pursue a more strategic development approach in the region. While some geopolitics plays out, other mechanisms—such as the Arctic Offshore Regulators Forum—will allow work to proceed on regional development. Livingston asked if AC has been the victim of the tenuous relations between Russia and other countries. Or, if it is, instead, a tool for improving relationships on a technical and pragmatic basis.
Adams answered that the global interest is served by having this cooperation. The Arctic has been a region of low tension, and there is no sudden need for that to change. A lot of the activity there is related to security.
Livingston asked how the Arctic is interlinked with different global processes, with physical climate change as the most salient. One thing not yet mentioned is the role of Observer States. Given the proliferation of applications in the recent years, he asked, how will Finland likely approach the role of the AC observers in the AC?
Kauppi said their interest is welcome. But, AC observer status is a tricky issue. The European Union’s observer application, for example, was blocked by Russia. Council members hope an approach can be developed before next year’s ministerial meeting. In general, observer participation is very positive, the observers have a role, and the process for accepting new observers is a bit of a work in progress.
Other questions and answers:
Q: Is there a real challenge in that Russia’s sense of its economic interests diverges sharply from the rest of the council members? A: “Maritime overcapacity and declining rates” are a current reality in maritime industry. Both are direct functions of a recovery from the 2008 economic crisis. The western countries are not back to full scale activity at the moment, but they probably share Russia’s long-term interest in the Arctic as a focus for economic development. Russia is very heavily invested in the development of port facilities and infrastructure reinforcement.
Q: What will be the enhanced role of the Arctic countries compared to observers?
Kauppi said that when the number of observers grows, added challenges will occur. But from the AC perspective, the eight Arctic states clearly have the key role. Observers can be part of the process and can contribute decisively. This is a good development, and the challenges are manageable.