Economist Arctic Summit Oslo 2015

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Ladies and gentlemen,

We live in a time of geopolitical change.

As economic and political influence is moving east and south, eyes are increasingly turning to the north, too.

With good reason. 

Firstly, the challenges we face in the region mean that we must stay focused on developments in the Arctic.

Secondly, the opportunities in the High North ensure that we are focused.

Thirdly, the solutions we have found in the Arctic can provide inspiration in the quest for solutions elsewhere. 

The attractions of the High North are to be found in the Arctic itself – in its real value.

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The Arctic is a region of peaceful cooperation, stability, respect for international law and sustainable management of resources.

Some people have suggested that current geopolitical tensions could spill over and pose a challenge to the peace and stability that characterise the region.

The overall goal for Norwegian Arctic Policy is to ensure that that does not happen.

This is of crucial importance for economic development in the whole region.

It is important for research and innovation.

It is important for global nutrition.

It is important for the global environment.

And it is important for international peace and security. 

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Interest in the region has been increasing among Arctic and non-Arctic actors alike.

The Arctic is where Europe, North America and Asia meets.

All Arctic states have formulated specific Arctic strategies.

They have worked together to strengthen the Arctic Council, making it a model of potential regional cooperation for other parts of the world.

Two years ago, the EU, Italy, China, India, South Korea, Japan and Singapore were lining up to join the Arctic Council as observers.

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Some of the predictions as to how quickly the opportunities in the Arctic could be exploited have been too optimistic.

We never believed that the Northeast Passage would replace the Suez Canal as the maritime highway of the world – but that does not change the fact that it has potential.

Even before oil prices were cut in half, we knew that harsh conditions and long distances would make the development of a petroleum region a long-term project.  

In fact, planning and preparing for exploration of oil and gas is always a painstaking and demanding process.  

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The Northern Lights attract numerous visitors to the Arctic, but so does Northern Enlightenment.

As we speak, scientists from ten different countries are on board the Norwegian vessel “Lance”, locked in the ice somewhere close to the North Pole.

Their aim is to study how the ice behaves when winter turns to spring, and how the Arctic ecosystem wakes up. Their efforts will help to predict the future of sea ice and its effect on global weather and climate.   

130 years after Fridtjof Nansen’s attempt to make the ice transport him to the North Pole, the search for answers in the north continues.      

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Unfortunately, we already know that we will not like all the answers they find.

Too ignore the Arctic would be to ignore the greatest challenge of our time:  

Climate change. 

Climate change is the main driver of change in the Arctic.

According to some estimates, the Arctic summer ice cap will completely vanish by 2050.

The Arctic is a barometer of global climate change.

The global effects of changes observed in the north are alarming.

The melting of the polar ice sheet is not caused primarily by activities in the Arctic, but by emissions from all over the world.

It will cause sea levels to rise, accelerate global warming and probably change monsoon weather patterns.

2015 will be a decisive year.

The fate of the Arctic environment – and the pace of global climate change – depends on our ability to reach an agreement at the Climate Change Conference in Paris.

There are considerable costs involved in solving the climate crisis today.

But these are nothing compared to what it will cost if we wait ten or twenty more years. 

You don’t have to be an economist in order to see the cost of inaction.

Even if we succeed in reducing the emissions today, climate change will continue for many years.

We must pursue two tracks: reducing emissions of greenhouse gases, and at the same time adapting to the inevitable impacts of climate change.  

Our attention to the Arctic must be increased – not reduced.  

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Falling oil prices do not change the fact that a considerable share of the undiscovered oil and gas in the world is located in the Arctic.   

While oil prices go up and down, the resources don’t’ go anywhere – until they are exploited.

Short-term changes in supply and demand do not change the geological facts on the ground. 

It is easy to forget that the price of oil hit 145 dollars before the financial crisis in 2008.

It is still expected that global demand for energy will increase by 35–40 % over the next 20 years.

Oil and gas will continue to be dominant in the global energy mix for decades to come.

Even though we must make the global shift to low-carbon and renewable energy, gas will play an important role as a bridge to get there.

Gas emits about half the amount of C02 that coal does.

For that reason, it is safe to assume that Arctic gas will have its day.

The key challenge will be to strike the right balance between utilisation and protection.

The Norwegian oil and gas industry operate under the strictest environmental and security standards in the world, and it has done so for decades.

The sensitive environment in the Arctic compels us to continue to improve our technology.

This should be the approach to oil and gas production everywhere. In fact, technology developed in the north is also being used in other parts of the world.

The way in which we meet the energy demand of the future must survive the judgement of the generations of the future.    

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This judgement will also depend on our ability to preserve the Arctic as a region of good neighbours and respect for the rules of the game.

The peace and stability that characterise the Arctic is not least due to a modern and comprehensive approach to security policy.

For Norway’s part, our NATO membership has compensated for the lack of symmetry between Norway and its larger neighbour, Russia.

It has made it easier to cooperate with Moscow.

Having a robust and predictable defence does not prevent cooperation – it enables it.

But in addition to security policy in the classical sense, stability in the Arctic is also based on cross-border cooperation and a whole range of other factors.

The commitment of Norway, Canada, Russia, Denmark and the US to the Law of the Sea is preventing a race for resources.

Overlapping claims to the continental shelf in the Arctic Ocean will be settled within the established legal framework.

Clear borders make cooperation easier, and conflict less likely.

This highlights the crucial importance of international law for peace, stability and economic growth.

And it is a good example of the way in which adherence to agreed principles benefit small countries and great powers alike. 

In other regions of the world too, all parties to maritime and other territorial disputes should see that it is in their interest to follow the Arctic example.  

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In addition to a legal framework that all Arctic stakeholders adhere to, we also depend on well-functioning political institutions to address Arctic issues.

The Arctic Council, which has been strengthened in recent years, is crucial in this respect.

The Council produces groundbreaking reports on the Arctic. Its extensive work on climate change has been particularly important.

New challenges, such as oil pollution and the need for search and rescue cooperation, have been met through the conclusion of legally binding agreements between the Arctic states.

At a time where political contacts between Russia and European countries have been reduced, cooperation in the Arctic Council is even more important.

The Arctic states have shown that they are able to find new solutions in response to new challenges.

As emerging economies in Asia seek to develop similar structures of regional cooperation to those that have served European peace and prosperity so well, they are looking not only to the EU, but also to the Arctic Council.

In line with our national effort to boost economic growth in the north, we welcome the establishment of the Arctic Economic Council.

The opportunities in the Arctic are so much more than oil and gas.

In North Norway, there is considerable potential in the maritime sector, the seafood industry, the mineral industry, tourism and space technology, and many other areas.

Let me give you a concrete example.

I recently visited a company called ArcticZymes in Tromsø.

ArcticZymes has become a million dollar business after having discovered how to exploit by-products from local shrimp factories, by identifying new enzymes for use in molecular research, diagnostics, and manufacturing.

Our aim is to make the north one of the most innovative regions of Norway, promoting growth and prosperity based on knowledge and science.  

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Norway has a long history of constructive neighbourly cooperation with the biggest Arctic state – Russia.

On a number of issues, we have been able to find common ground – even in difficult times.  

Already during the Cold War, scientists and diplomats from Norway and Russia were working together to settle fish quotas that were sustainable.

We were thus able to prevent the depletion of fish stocks that has been seen in so many other waters. As a result, the Barents Sea is teeming with cod today.

In 2013, the cod quota reached an all-time record of 1 million tonnes. Once again, the wisdom of listening to scientists is proven.

However, we cannot ignore the fact that we are facing a new security landscape in Europe.

Russia’s violations of international law in Ukraine have unavoidably affected our bilateral relations.

Norway has implemented restrictive measures against Russia that are identical to those of the EU.

We have also suspended our military cooperation and scaled down political contact in a number of areas.

International law is the foundation for peace and prosperity – and we cannot afford to compromise when its very pillars are being rocked.    

It is in our interest to maintain constructive relations with Russia – but the responsibility for improving the current situation rests with Moscow.  

As neighbours and Arctic coastal states, Norway and Russia have many challenges in common.

We thus continue our cooperation in crucial areas such as management of joint fish stocks, environmental protection, nuclear safety, search and rescue, maritime safety, and Coast Guard and Border Guard activities.

We also wish to continue cooperation with Russia in the Arctic Council and other regional forums.  

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Ladies and gentlemen,

The Arctic states have worked together on managing resources, creating jobs, preventing accidents and combatting climate change.

As we move forward, we must continue to be guided by knowledge, cooperation and respect for universal principles.

As we recently have seen, we cannot take continued progress for granted. Hard work and longterm commitment are required.

The modern Arctic adventure is just beginning.

The Arctic is a region of challenges, opportunities and solutions – solutions that can be an inspiration for other regions.

It is of global importance that the Arctic also remains a region of peaceful cooperation, respect for international law and sustainable management of resources. 

Norway will continue to be a responsible actor and partner in the Arctic.

We are taking the challenges and the opportunities seriously, and we are aiming to preserve and strengthen the solutions that have served us so well.