Woodrow Wilson Center Polar Initiative: Human Security and Development in the Arctic

Produced by the Polar Initiative at the Woodrow Wilson Center, the Human Security & Development session focused attention on the people who actually live in the Arctic. The panel discussed the Alaska experience in the U.S. and the Nunavut experience in Canada.

 

Moderated by David Biette, Director of the Polar Initiative at the Wilson Center, the panelists included:

  • Anita Parlow, former advisor to Harvard-MIT Arctic Fisheries
  • Anthony Speca, Managing Principal, Polar Aspect, Nunavut
  • Craig Fleener, Arctic Policy Advisor, Office of Alaska Governor Bill Walker

 

In her introductory remarks, Parlow described the importance of cooperation in the Arctic in the context of environmental protection, including fisheries and development.

 

“The Arctic appears to teeter between spiritual and romantic terms while it’s a source of future prosperity,” she said. Referring to Ed Struzik’s Future Arctic (published February 2015) to illustrate the dynamics of the “many Arctics” and the political struggle over climate change, Parlow said sympathetic ears are difficult to find for discussions about the impact of a changing Arctic on human development and security, and the needs of Arctic peoples.

 

The Canadian Perspective of Arctic Human Security

 

Anthony Speca traveled to DC from Iqaluit, Nunavut, where the Arctic Council Ministerial was held in April. The conversation about human security is more important than who owns the North Pole and who will drill for oil, he said. He agreed that “many Arctics exist,” all with different perspectives on human security.

 

He focused his remarks on the territory of Nunavut, which was created in 1999 out of the Northwest Territories (NWT). To illustrate the territory’s vastness, Speca said Nunavut constitutes 20 percent of Canada’s total land mass and is about 25 percent larger than Alaska. Approximately 85 percent of its population is Inuit.

 

The Nunavut government is not an Inuit government. Constitutionally, it is the same as NWT and the Yukon Territory in that its territorial government retains no inherent sovereignty, unlike a province.

 

Instead of policy recommendations, Speca pled for a change of mindset about the North in order to remove obstacles on Arctic human development and security.

 

“There is a moral dimension to the question on human security and development in the Arctic that cannot be addressed with technical solutions,” Speca said.

 

Beginning with underdeveloped resources that are not used to their full socioeconomic potential—a chronic issue in Nunavut—Speca said natural capital such as minerals, gems, oil, gas, and metals are stranded in the territory because little to no infrastructure exists to mine them.

 

This is also the case for human capital, Speca said. The Human Development Index (HDI) measures GDP per capita, education attainment, and life expectancy, and places Canada in the top ten as a world leader in human development, alongside Sweden and Iceland. Speca looked for Nunavut’s specific HDI, and found the territory was on par with Palestine and Paraguay.

 

As background, Speca said Nunavut’s villages were created in the 1970s for federal government “convenience” in providing “public services,” rather than for the benefit of the region’s population, still living subsistence lifestyles.

 

Moving traditional people to a modern society, Speca said, meant the Inuit people had to make money to keep acquiring the efficient technologies, such as snowmobiles and rifles, they had adopted. Selling seal pelts was a way to raise money, and one sealskin could pay for a whole day’s hunting.

 

In 1972, under the Marine Mammal Protection Act, countries started to ban the importation of seals hunted in Newfoundland, which did not immediately impact the Nunavut Inuit until Europe followed suit with its own ban in 1983. The campaign against sealing tainted the idea of wearing sealskins, including adult ring seal pelts. NWT estimated that 60 percent of Inuit community income was wiped out by the ban, which is still in effect.

 

Speca said this helps explain Nunavut’s low HDI indicators, and is an example of the obstacles to human development in the Arctic. Speca cited Greenpeace’s campaign to ban Arctic oil and gas development as another obstacle.

 

Arctic peoples are aware of the potential consequences of drilling and have mixed feelings about development, said Speca, but they should be the ones to decide, not outside groups. Governments should listen to Arctic peoples instead of putting up obstacles.

 

The Canadian federal government is also not fulfilling its responsibilities to the Nunavut territory, Speca said. The Nunavut government provides 90 percent of public services via a block grant, which covers the cost of schools, health care, travel, public safety, housing, transportation, and more. The federal government uses Territorial Formula Financing (TFF) to calculate the territory’s expenditure needs in a given year and its revenue-generating capacity. It subtracts the revenue figure from the expenditure figure to calculate the block grant total funding.

 

Speca criticized the federal government’s methods for calculating Nunavut’s expenditure needs. In the 1980s, the territory’s commissioner would review a list of spending priorities approve or deny each item, with the approved items then added up to determine the grant. While the amount has shifted with population factors, Speca said the block grant is now what the federal government is “willing to spend, not what the Nunavut people need,” and is often only awarded based on current funding levels.

 

While the Nunavut government itself has been inefficient in its spending and allocations, Speca said the federal government must change its mindset before the gaps can be filled for successful human development, given Nunavut’s low HDI.

 

Nunavut’s suicide rates are 10 times that of the national average, he noted, with 50 percent of the population living in public housing, and 80 percent relying on social assistance. Diesel fuel generators power most of the territory, and the region has no roads. These conditions would not be tolerated in southern Canada.

 

“If Nunavut is ever going to achieve the levels of development and security it deserves, it will have to start with the federal government,” Speca declared.

 

Acknowledging the argument that the private sector could help improve the livelihood of Nunavut people, he said the private sector depends on the federal government to provide a base of infrastructure and education, which hasn’t occurred in Nunavut.

 

“There will not be human development simply by relying on market forces in Nunavut,” Speca said. The territorial government can make its own decisions on resource development and is working toward a devolution process, the same as NWT, but “unless you’re willing to put your hand in your pocket to make that vision happen, it’s just words on paper.”

 

Expanding on this, Speca said Nunavut’s private sector is led by construction and mining, and is developing a commercial fishing industry. Nunavut is an extremely costly place to do business. Speca said his roundtrip flight from Iqaluit to DC cost $2,500 USD. While over $1 billion is generated from the private sector, mining companies have to build all of their infrastructure, cope with poor broadband connectivity, and import nearly all materials, including labor.

 

“It’s clear the government must put the platform in place before the private sector can play its role,” he said.

 

The Arctic will always be the periphery for Canada, Speca said, and not the central focus of development. Given this situation, Nunavut will always depend on federal assistance to offer public services at acceptable levels.

 

Canada’s claim to the Arctic relies on effective governance for Arctic residents. “The healthier the communities, the more integrated Nunavut can be with Canada, which is worth paying for,” Speca said. However, the federal government is not thinking about the return on that investment, he concluded, which must also include cultural diversity, and a moral case for public services.

 

The Alaskan Perspective  

 

Fleener said the Alaskan perspective is much like Nunavut’s. “If you’re from the North, it’s how things are, and are not necessarily problems.”

 

Fleener described Alaska as a vast nation with thousands of miles of coastline, filled with natural beauty and rich resources. His hometown of Fort Yukon is located in a 55,000 square mile region populated by 1,200 people, living with little development in a subsistence economy.

 

“The tyranny of time and distance keeps Alaska underdeveloped and expensive to live,” he said. He reminded the audience that the Arctic is not empty and not devoid of life; it has had continuous human occupancy for thousands of years.

 

Because Alaska does not have enough people to pay taxes to build the necessary roads and schools, Fleener said Alaska has relied on taxing the development of timber, oil, gas, minerals, metals and more resources to help pay for the state’s public services. Another problem is the federal government intervenes in Alaska on conservation, fish and wildlife management, oil and gas development, and road-building.

 

Fleener said the state struggles with climate change and how to adapt to those changes, such as shifts in caribou migration patterns. Both the state and federal governments have adopted hunting and fishing regulations that have limited the human ability to adapt.

 

Alaska needs more flexibility across the spectrum, not just with hunting and fishing, but also with the lack of coastal sea ice impacting communities have been forced to be sedentary. Fleener said a thousand years ago, the communities would move when sea levels rose and home sites were threatened. But now, the existence of land ownership, water and sewer systems and other infrastructure limits the ability to move.

 

The greatest problem in terms of adaptation is the inability to adapt, Fleener said. “Climate change is not a mystery to rural peoples, but in cities, it is more difficult to notice those changes.” The officials making decisions in faraway urban areas such as Juneau and DC place too much emphasis on the changes they do not fully understand or experience firsthand.

 

Alaska was established with the territorial mindset, Fleener said, as the state exports raw materials to generate income from its resource base. The broad solution is for Alaska to develop a sustainable economy that is not focused on a single asset—in Alaska’s case, oil—but instead has diversified resources in addition to petroleum development.

 

Another hindrance to Alaska’s human development is the federal government owns two-thirds of the land.

 

The ongoing controversy about building a road between King Cove and Cold Bay through the Izembek National Wildlife Refuge is the classic example. Fleener said in the preceding week two individuals from King Cove were medivacked to Cold Bay, just 12 miles away, at an extreme cost. “But [U.S. Department of Interior] Secretary Sally Jewell said it’s more important to protect wildlife than the health and safety of people.” Meanwhile, Alaska’s congressional delegation and state government continue to fight DOI’s decision to reject the project.

 

Fleener said innovation is the best way to move forward on infrastructure and development. While Alaskans support diversified resource development, they still want an oil and gas industry. Fleener said the state and the University of Alaska should fund innovation that would reduce the cost of renewable energy platforms and drive down electricity costs by at least 10 percent. This level of savings would encourage more Alaskans to buy into the resource instead of relying on diesel, which is still less expensive and more accessible than other means.

 

Russia’s military buildup in the Arctic is another reason for Alaska’s development, Fleener said. “There needs to be a new national imperative for Alaska, looking not only at infrastructure needs, but also for national security given its strategic importance. Remember, Alaska was the only place (in the U.S.) a foreign power occupied in World War II.”

 

Q&A Session

 

Parlow asked Speca if the agreement between the federal government and Nunavut was used to extinguish title in exchange for resources.

 

Speca said the land claim agreement should not be confused with the fiscal agreement. In 1993, Nunavut and the federal government signed a land claim agreement, and aboriginal titles were recognized in the process. It was incumbent on the crown to negotiate with the Inuit to define and codify the aboriginal rights that resulted in the land claim, which is an appendage to Canada’s constitution.

 

The land claim included an article to create a separate territorial government in NWT’s eastern Arctic region, but didn’t set it up. The article is the context in which the territorial government operates. Speca said the Inuit would like to be self-governing and have the funds to provide services to themselves. The federal government did not want to consider this at that time, however, despite having signed similar agreements with other First Nations.

 

Parlow asked if devolution would lead to a split of revenue and resources.

 

Speca said there are two components to devolution. First is the political component of land management, in which the federal government works with Nunavut, but final permitting decisions rest with the Minister of Aboriginal Affairs and Northern Development.

 

The second component is splitting resource revenues, which has not yet been negotiated for Nunavut. NWT was offered a 50-50 resource royalty split. The split is subject to a five percent cap on the expenditure base. In Nunavut, however, such a structure would bear no relation to the cost of operating the territory, and would be unfair considering the Nunavut’s unique problems. The federal government’s own appointed expert panel agreed Nunavut’s expenditure base is too low to be granted the same cap as NWT.

 

Parlow asked Fleener what kind of a strategy Alaska is considering to create a capability for the people to decide their own needs.

 

Fleener noted the U.S. chairmanship of the Arctic Council will generate lots of interest in Alaska, and the state is taking every opportunity to educate the public, and use the two years as wisely as possible to highlight the issues of the North.

 

Because the state is home to 229 tribes and 12 Alaska Native regional corporations, Alaska Natives are a very powerful force, accomplishing their goals via their resources and the access to federal dollars.

 

One strategy is to work together by solidifying the partnership between the tribes, corporations and the state. Alaskans did not partner as much as they could have during the peak of oil development, Fleener said, but the oil price drop highlighted the need for partnerships in the face of the current budget crisis. Another component is working with the federal government without becoming more adversarial.

 

Parlow asked if Alaska could have a trade agreement with Russia given the state’s close proximity.

 

Fleener said the state is very interested in a strong bilateral relationship, but that is difficult under current economic sanctions. The Arctic Council chairmanship will bring Russian delegations to Alaska for meetings through April 2017, which could help improve the relationship and create opportunities. Rail and port partnerships may be possible in conjunction with the federal governments, but “most definitely” through private investment.

 

Parlow said a conversation occurred at the Inuit Circumpolar Council about how climate change is impacting shipping and offshore development in the context of the Alaska Native Claims Settlement Act (ANCSA) and subsistence rights. Parlow asked if the state is working with the Alaska Native corporations on offshore oil development.

 

Fleener said ANCSA makes OCS development a difficult issue. In the Alaska Native community, development is considered risky because of the potential impacts on subsistence activities. This issue is becoming more important to coastal communities.

 

Parlow noted the themes of subsistence, renewable energy, and oil and gas development in the sparsely populated areas of Nunavut and Alaska. In NWT, the government found the people had a particular interest in oil and gas development and protecting subsistence and put resources into doing both. Parlow asked if Alaska and Nunavut are working toward the same goal.

 

Fleener said nobody in Alaska, or in North America as a whole, considers resource development without the environmental impacts. “Hunting and fishing is so important, it is codified in the state constitution, and discussed daily at the public level, and management is critical to provide resources for its people,” he said. But oil and gas development is also critical. Development and subsistence work hand in hand in Alaska, and the state will continue to work on both issues.

 

Speca agreed the situation is similar in Canada. Nobody wants to hurt the Arctic environment with mine tailings, oil and gas spills, or overfishing. The question of balancing development with conservation will depend on the current projects, and the question for the people in the North is who is making those decisions, which was considered in the land claim.

 

“Nobody needs to tell the Inuit about the importance of fish and game management, and ensuring they can make those decisions via a co-management system,” Speca said.

 

Responding to questions from the audience, Speca and Fleener covered a variety of topics, summarized below.

 

  • Is there an Arctic nation that acts as a good example for human development and security?
    • Speca said Nunavut looks to Greenland as a place where human development has been better secured, though no Arctic country takes human security fully seriously. Greenland contrasts with Nunavut in that it is working toward independence from Denmark while Nunavut is part of the Canadian confederation.
    • Fleener agreed that no single country is a perfect example, but Alaska envies the infrastructure the Canadian government built to connect rural communities in the Yukon Territory. He noted the Scandinavian countries are highly developed in adapting to their environment.
  • How important is the U.S. State Department GLACIER Conference in Anchorage?
    • Fleener said it is a great opportunity to bring people together to highlight the changes in America’s Arctic, and have the opportunity to share information about Alaska’s important issues. The State Department and other agencies will have their own issues, such as climate change, to discuss while Alaska can provide supplemental information. The need to build more icebreakers is one issue the state hopes to highlight.
  • What is the role of Alaska’s Permanent Fund during the state’s budget crisis?
    • Fleener said the Permanent Fund is a rainy day fund for the state, and it provides a mechanism for Alaskans to own some of the wealth generated by the state’s petroleum resources. He said the Permanent Fund would be better served if the state could put more money into it. Investment-generated revenues could pay for government and balance the highs and lows of a commodity based economy.
  • Other petroleum states like North Dakota have distinctly decided not to adopt the Alaska model because they don’t want to lose revenue in long-term investments. Because Alaska has been locked into this model for 45 years now, is the state now looking at other models?
    • Fleener said North Dakota has more resources available without Alaska’s time-distance problem in Alaska. More roads and infrastructure have been built and more options are available for development and investment. Given Alaska’s unique nature, Fleener said the Permanent Fund is a brilliant choice for the state, though it may need a few minor tweaks to strengthen it.