Arctic economic potential:
The need for a comprehensive and risk-aware understanding of Arctic dynamics
Harri Mikkola & Juha Käpylä
The Finnish Institute of International Affairs
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The melting of the Arctic is expected to offer prospects for
maritime transport and hydrocarbon exploitation that could potentially create
an Arctic economic boom.
In principle, more accessible Arctic sea routes could offer
substantial savings in logistics between Asian, American and European markets
when compared to the current global maritime trade routes via the Panama and
It is estimated that as much as 13 per cent of undiscovered
oil deposits and 30 per cent of undiscovered gas deposits on the globe are
located in the Arctic area. These hydrocarbon prospects are further estimated
to make the Arctic area a major global energy hub.
However, the extent and pace of overall Arctic development
is still difficult to forecast. There are many uncertainties and challenges in
the Arctic environment, infrastructure, technology and global economy that may
hinder the expected trajectories.
What is needed is an informed, comprehensive assessment of
the risks and gains related to the development of the Arctic.