The Arctic: One of the Last Great Economic Frontiers

The Arctic is often misconceived as a beautiful but vacant expanse of ice-covered land and sea. In reality, it is a vibrant and diverse region that spans eight of the world’s leading economies—Canada, the Kingdom of Denmark (including Greenland and the Faroe Islands), Finland, Iceland, Norway, the Russian Federation, Sweden, and the United States of America—and more than 18 million square kilometers, an area larger than South America.

Today, pan-Arctic economic activity exceeds US $500 billion per year—larger than the economies of Belgium, Poland, or Thailand—and is responsible for a significant share of the world’s food, minerals, and energy.

Although not widely recognized, the Arctic is a leading region for biotechnology, cutting-edge scientific research, and meaningful and measurable success in sustainability for the entire planet—countries like Norway and Iceland can generate 100% of their electricity from renewable sources.

The simple truth is: The Arctic impacts people everywhere in their everyday lives. As climate change impacts the Arctic, the region will only grow in importance to the world, both environmentally and economically.

As the world adapts to a changing climate, the Arctic is discovering tremendous new opportunities. By 2040, the Northern Sea Route could be open year round, resulting in faster, more energy-efficient global trade routes. The Arctic of tomorrow is a new frontier of economic growth and global commerce, one with significant potential benefits to society. In the near future, the Arctic will:

Move more of the global economy

Arctic sea ice coverage is already 65% of what it was in 1979. In the future, the Arctic region will play a pivotal role in global trade, with more than 25% of Asia-Europe container trade expected to travel through the Northern Sea Route by 2030.

Feed more of the world

Over the next 40 years, warmer waters, sustainable aquaculture, and innovations in the “blue economy” could result in fishery catches 70% greater than today.

Deliver more “green” products and innovations

Marine bioprospecting in the Arctic continues to discover and develop new biological applications for medicine, biofuels, health and wellness, and industrial use.

Help power the world with clean energy

While it is widely cited that the Arctic holds nearly one-quarter of the world’s undiscovered oil and gas reserves, its greatest potential lies in renewable energy. The ability to generate and share energy from wind, hydro, tidal, geothermal, solar, and biomass makes the Arctic a meaningful leader in the future of clean energy. Subsea cables make it possible for the wealth of renewable energy in the Arctic to be exported to the world.

As the climate transforms the Arctic, the Arctic will transform the world. To adapt and thrive, communities will need critical and careful investment, paired with a strong commitment to protect and preserve the environment for future generations.

Source: Guggenheim estimates using national source data, International Energy Agency, Eurostat.