Rapid and disruptive change in the Arctic environment presents uneven prospects for investment and economic development. All across the Arctic, changes in climate will create new vulnerabilities for infrastructure and present new design challenges.
The Arctic is likely to attract substantial investment over the coming decade, potentially reaching $100bn or more. However, given the high risk/potentially high reward nature of Arctic investment, this figure could be significantly higher or lower.
Uncertainties and knowledge gaps exist around the nature of environmental change, the geological potential of the Arctic and environmental baselines, as well as seabed mapping, and how to deal with the risks of significant Arctic industrial activity.
Arctic conditions will remain challenging and often unpredictable. Many of the operational risks to Arctic economic development – particularly oil and gas developments, and shipping – amplify one another. At the same time, the resilience of the Arctic’s ecosystems to withstand risk events is weak, and political and corporate sensitivity to a disaster is high.
The environmental consequences of disasters in the Arctic are likely to be worse than in other regions.
Given the Arctic's iconic status and sensitive environment, Arctic development is often politically contentious, with sometimes opposing interests and perspectives between local, national and international levels. Political support for development will continue to represent an uncertainty for businesses seeking to invest in Arctic projects.
The challenges of Arctic development demand coordinated responses where viable, common standards where possible, transparency and best practice across the north. These frameworks need to be in place to enable sustainable development and uphold the public interest.
Companies operating in the Arctic require robust risk management frameworks and processes that adopt best practice and contain worst case scenarios, crisis response plans and full-scale exercises.