The Loss of Arctic Sea ice: billion dollar business opportunity that might bankrupt the ecosystem
As the Director of Sustainability at the Smeal College of Business, it is my responsibility to keep my mind constantly steeping in a solution of: 1 part business, 1 part technology, and 1 part each of environmental and social impact, including emerging science, news and events. (Stir together and steep for years until it reaches desired level of understanding).
In "That's News to Me" I share what I am reading with the growing Triple Bottom Lion community. The current book I am reading is The Innovator's Solution by Clayton Christensen.
My notes: Blowing the Family Inheritance
Imagine you get a check in the mail with a bequest from a late relative for $10 million dollars. What would you do? The research on lottery winners suggests (contrary to popular belief) you would keep your job and manage it pretty well. You wouldn't be any happier generally speaking, but you'd probably buy the more expensive bread at the store. Your bequest and the lottery winnings are a private resource. However, the research on "commons" problems, where a resource isn't privately owned but held "in common", is quite the opposite. You are likely to exploit the resource before the others do the same.
In my survey of the news this week, I became interested in the scientific and business discussions of the melting Arctic sea ice. It's the perfect example of a "tragedy of the commons" scenario with ecology and industry either colliding or choosing to converge, cooperate and innovate to protect the resource and ensure long-term value creation. The Law of the Sea seems an insufficient mechanism to manage the myriad issues and interests in the Arctic.
YaleEnvironment360 provides some of the latest scientific research while the AP showcases the billion-dollar business opportunities. Will we blow the inheritance of the Arctic or invest it through conservation and careful use?
Alien Waters: Neighboring Seas Are Flowing into a Warming Arctic Ocean (by Cheryl Katz in YaleEnvironment360)
Melt pools atop sea ice in the Arctic Ocean in August 2009. Image credit: Pablo Clemente-Colon/National Ice Center (from YaleEnvironment360)
"The volume of Pacific Ocean water flowing north into the Arctic Ocean through the Bering Strait surged up to 70 percent over the past decade and now equals 50 times the annual flow of the Mississippi River. And over on the Atlantic flank of the Arctic, another recent report concludes that the Arctic Ocean’s cold layering system that blocks Atlantic inflows is breaking down, allowing a deluge of warmer, denser water to flood into the Arctic Basin."
Click above or here for NASA animation
"As climate change pushes the cold and ice a little farther north each year, it is spurring talk of a gold rush for the Arctic’s abundant natural resources, prized shipping routes and business opportunities in tourism and fishing. The Arctic, including the fabled Northwest Passage between the Atlantic and the Pacific, is among the last regions on earth to remain largely unexplored."
"The Arctic stretches from the North Pole to roughly the 66th parallel north, an area of about 20 million square kilometers (almost 8 million square miles) of freezing seas and tree-less lands.
The U.S. Geological Survey has estimated that up to 30 percent of the world’s undiscovered gas and 13 percent of oil waiting to be found are inside the Arctic Circle. Even if only a fraction of these fossil fuels are tapped they could be worth hundreds of billions of dollars.
Coal, diamonds, uranium, phosphate, nickel, platinum and other precious minerals also slumber beneath the icy surface of the Arctic, according to Morten Smelror, director of the Geological Survey of Norway. And the growing need for sophisticated batteries to power electric cars and handheld devices likely will drive demand for rare earth elements, lithium and cobalt found in significant amounts in the Arctic regions of Russia, the Nordic countries and Greenland, he said."