THE FUTURIAN #4
In November of 2021 eighteen Russian cargo ships were stuck in the Arctic ice due to an early, unexpected freeze. What if this were a signal of an unexpected future trend?
Records show that since the late 1970s the Arctic Ice cover has been on a steady decline. The scientific community, and political leaders globally, are confident that unless there is intervention we will continue on the path towards a Blue Arctic future — a future in which the Arctic polar ice cap has largely melted and the Arctic Ocean becomes navigable — with an increase in both duration and area of an ice free Arctic.
How confident we are in the Blue Arctic future? We must respect the unpredictability of nature and consider the possibility of a disruptive alternative. One such alternative is a White Arctic future, where the melting ice trend reverses and leads to either a sustained ice cover or simply an increase in ice cover. Such a future could emerge from a combination of wind, tides, and ocean currents that concentrate a cooler spot within the Arctic Ocean. If this were to occur within a key bottleneck, such as the Bering Strait, then any transport lanes developed with the assumption of a Blue Arctic would be severely disrupted. In 2021 we saw the disruption that could occur when the Suez Canal — another key chokepoint in global shipping routes — was blocked for six days. Key supply chains were disrupted on a global level for weeks after the Suez Canal was freed again. A key blockage in a White Arctic scenario has the potential to be as equally disruptive. Like most wild card scenarios, the White Arctic is one that has a disproportionately large impact for a relatively low probability of occurring.
What would this White Arctic future look like and how do we factor it into the future so we are not blindsided by the possibility of it emerging?
Development in the Arctic is risky, costly, and requires long-term planning. Reduced ice cover, coupled with strategic planning, could open up new economic and transportation opportunities that will bring investment and resources into the region. There is very little infrastructure currently in the Arctic region. The development to date has been hampered by the permafrost in the region. As the region warms, so the permafrost is expected to melt, allowing for the potential to develop transportation and supports rids for trans-Arctic shipping. We also must not forget the potential for the Arctic to serve as a major fishery as fish stocks migrate northwards, in addition to the mineral and hydrocarbon potential for the region. The region has much potential for commercial development in a warmer world. At the same time, the possibility of ice melt reverses — even if they were only to be temporary in nature — would have an impact upon long-term investments and shift the focus to short-term opportunities.
A White Arctic could mean a decrease in military investments in the region and an increase in geopolitical cooperation to support scientific and humanitarian efforts. It is safe to say that a White Arctic future could lead to reduced strategic competition over economic zones and an overall decreased interest in the Arctic as a major source of economic resources. We can be reasonably confident in this view because that describes the past history of the Arctic region. When resources were too costly to extract, and when the ice cap blocked the transportation routes, the Arctic was characterised by cooperation rather than competition. A White Arctic could take us back to that place.
Current investment strategies, both commercial and military, are based upon the presumption that a Blue Arctic emerges in the future, where the Arctic Ocean becomes largely navigable for a significant portion of the year, and where the transit routes across the newly opened Arctic allow significant reductions in shipping freight costs between the Far East and Europe and the eastern seaboard of North America. Each of these assumptions on which those investments are based could be called into question if the Arctic continues to freeze in an unpredictable way. That is, if a White Arctic wild card scenario emerges.
However, the reality of a White Arctic future emerging in the short-term seems unlikely. First, we may see pockets where the ice does not melt or even seems like it is reversing, but overall the data is clear that Arctic ice is fading, that is, becoming thinner. Second, economic resource extraction and transportation network development in the region could be accelerating ice melt. As more development occurs in the region, the ability for the ice melt to reverse is decreased.
There is a tension between the Blue Arctic and White Arctic futures. Russia and China have strong incentives to drive toward a Blue Arctic in the hope of reaping commercial and military benefits from a more navigable Arctic Ocean. At the same time the climate change message is that humanity should strive to reverse the melting ice, with a number of incentives to adopt policies to halt the loss of ice cover. From the perspective of Russia and China, this tension has some way to play out. Whilst wanting to appear as responsible global citizens, Russian and Chinese policy is directed at harvesting the Blue Arctic scenario in the years to come. A White Arctic would upset these plans significantly and call into question the viability of the associated investments. One could say that the last thing the Polar Silk Road needs is a return to polar conditions!
Even if the Arctic shifts in the direction of a White Arctic (naturally or through human climate change reversal efforts), the economic and transportation development activities that have already started in the region could stall. As we have stated, they are based upon a set of conditional assumptions which may not come to pass. Indeed, the disrupter could become disrupted itself if, for example, the widespread roll out of 3D and 4d printing were to make redundant the transportation of goods from the Far East to the point of consumption.
Although a possibility that should be considered in long-term planning, the White Arctic future is an unlikely scenario. And yet, like most wild card scenarios, it is one that ought to be tracked because if it does come about, it will turn many investments on their head. It is a future that is best not to be blindsided by.
© Tyler Mongan 2021