Economist – http://www.economist.com/world/international/displaystory.cfm?story_id=1...

NUUK, GREENLAND – THE crowds in Nuuk, Greenland’s pretty coast al capital, marked the devolution of more powers from Denmark, on midsummer’s day, with cheers, processions and flags. The town thronged with men in white anoraks and women in kalaallisuut, an outfit of sealskin boots and trousers set off with a beaded top. Even a dusting of summer snow failed to chill the mood.

The newly elected prime minister of Greenland, Kuupik Kleist, who represents an Inuit-dominated party, promised that his country would act as an “equal partner” with Denmark, the old colonial power. The Danish prime minister, Lars Løkke Rasmussen, responded with a pledge that Greenland could claim full independence whenever it chooses. A more cordial separation is hard to imagine.

As in other parts of the Arctic, the indigenous people of Greenland are flexing their political muscles. In Greenland the Inuit, or part Inuit, account for nearly 90% of the total population of 57,000 or so, and they have been asserting ever-greater independence from Copenhagen, some 3,500km (2,175 miles) away. In similar fashion the Inuit of Canada won some powers of home rule over much of the country’s Arctic Archipelago when the new territory of Nunavut was set up a decade ago. In northern Norway and Sweden (and to a lesser extent in Finland and Russia) the Sami people have claimed autonomous powers; 50,000-odd in Norway even have their own parliament. Within the Russian Federation two northern indigenous peoples, the Komi and Sakha (Yakuts) have, at least in theory, their “own” autonomous republics, though what powers that gives them in practice depends on the ebb and flow of politics elsewhere in Russia.

>From New Zealand to Peru, the cause of indigenous people is one that stirs passion and widespread sympathy. A common struggle is either to curb mining or gain a share of the proceeds. In Canada a pressing demand is for consultation about their fate well before the prospectors arrive; in many places (Australia for example) the aboriginal peoples are struggling with social problems from alcoholism to domestic violence, brought by Europeans’ arrival and the end of traditional nomadism.

But if the indigenous peoples have a good chance of asserting real economic and political power anywhere, then it is probably the Arctic. The polar peoples are still relatively numerous; few outsiders have been able to adapt to the beautiful but harsh physical environment. And most of the countries where they live happen to be democracies.

The sense of pride in Greenland is palpable. Greenlandic has become the official language. Embassies will soon be replacing consulates in Nuuk. “It’s our land, our language, we have to do things ourselves,” explains a local woman.

But translating nominal political power, for example over public funds for schools and hospitals, into real independence will take a long time yet. The economy of Greenland remains dependent on Danish largesse. Although Mr Kleist has confident plans to develop tourism, as well as hydropower plants to take advantage of meltwater running off the Greenlandic ice cap, the locals today rely on Danish dole worth some $11,000 per person per year.

A modern way of life in the far north is necessarily costly. Greenland runs a Nordic-style welfare state on a sparsely populated lump of ice three times the size of France. With few roads, almost any trip between settlements calls for the bright-red planes of Air Greenland. A large share of health spending is spent ferrying patients to clinics.

But handouts, argues a local businessman, themselves discourage the creation of a productive local economy. One of the reasons why Greenlanders need Danish subsidies is the social problems (including poor health and bad school results) that afflict so many indigenous groups in poorer places. Life-expectancy in Greenland is lower than it is in China, in part because of alcoholism and suicide.

Similar problems beset the 30,000 (mostly Inuit) people spread wide and far in Nunavut in Canada. The population has some things in its favour—it is young and growing fast. But many aboriginal northerners drop out of school early and end up relying on government funds or public-sector jobs. A few may survive, or at least supplement their incomes, through traditional hunting (these days more often with snowmobiles than with dogs) but the economic outlook is clouded. A parliamentary report from Canada, published in 2008, noted that aboriginal people in the country’s north are typically poorer than their fellow citizens, as well as worse educated and more likely to be unemployed.

A pair of trump cards

Two factors, however, may boost Inuit bargaining power. One, oddly, is climate change. The receding ice cap in Greenland, and the melting of sea ice in the Arctic Ocean, are both threats and opportunities for his region, argues Mr Kleist. On the one hand warmer winters can make life harder for hunters, especially for those who rely on predictable sea ice. More rain and snow fall on Greenland in the winter. In some low-lying parts of the Arctic, the rising sea and storms are forcing whole villages to up sticks. Elsewhere melting permafrost is harming roads and runways. That raises costs for mining companies, seeking gold, rubies, diamonds, zinc, iron and more.
But warmer weather also stokes tourism: watching iceberg s, for example, in Ilulissat, the third-largest town, where plans to extend the airport for long-haul flights are under way. The loss of pack ice also makes sea-transport in the Arctic easier for longer periods each year. And fishermen report a rise in some fish stocks.

Thinner sea ice is also making it easier to drill for oil and gas in the region, a second factor which could improve its prospects. Many local leaders worry that a large hydrocarbon industry in otherwise untouched parts of the Arctic threatens a vulnerable ecology—but they can hardly ignore a potential bonanza.

In the short term, many decisions about energy extraction in the polar regions will be made in courts and legislatures much farther south. For example, courts in the continental United States have been hearing disputes between oil firms and environmental groups about drilling in Alaskan waters.

A mixture of green challenges and the uncertain geopolitical outlook (Russia has identified the Arctic as a place where its aspirations may well conflict with those of neighbouring powers) mean that the world’s oil and gas companies will have some hard calculations to make before they plunge into the melting waters of the pole. Almost all the sovereign powers in the region are making claims under the United Nations Law of the Sea, which allows countries to claim ownership of economic rights in parts of the seabed that are a physical extension of their own territory. Canada has until 2013 to file its claim—and intends to do so.

But as well as heeding the state interests of Canada, the United States and (for the time being) Denmark, would-be extractors will also have to take into account the determination of local people to claim a share of the action. The Inuit Circumpolar Council (ICC), which brings together Inuit representatives from around the Arctic, declared “sovereignty” over the Arctic’s natural resources in April this year, in an effort to forestall what they described as “inappropriate” development.

In practice, however, oil and gas resources offer local people the most plausible route to economic independence. The United States Geological Survey estimates that the Arctic could hold 90 billion barrels of oil and 47 trillion cubic metres of gas, much of it off Greenland (other surveys are more modest). The new Greenlandic government is now enthusiastically granting licences to oil firms, such as Exxon Mobil; companies are already prospecting over 137,000 square kilo metres of the nearby seas. Exploratory drilling is expected to get under way soon.

At the same time, the Greenlandic authorities are making clear their determination to be respectable global citizens. An official of the island’s Bureau of Minerals and Petroleum has specified that any companies extracting hydrocarbons in the neighbourhood must also develop and use carbon-storage technology. This would involve re-injecting carbon dioxide either deep underground or under the sea, in order to compensate the amount of heat-trapping gas that is being released into the atmosphere. In practice that may be a hard ideal to enforce. Artificial carbon storage on a large scale is still in its infancy; as environmentalists point out, some quite effective devices for carbon storage occur naturally; they are known as trees. But few of those are presently found in the Arctic.

In northern Norway the Sami, having won legal rights to some local resources under a 2005 law, are pushing for new compensation from firms exploiting minerals and oil and gas. 8 0We want to have a part of the benefit of natural resources, minerals, gold, oil,” says Marianne Balto, vice-president of the Sami parliament.

Aqqaluk Lynge, an Inuit campaigner who leads the ICC’s Greenland branch, does not oppose development, but fears that the interests of local people are too easily neglected, even with the recent political changes. As one of the drafters of the declaration of Arctic sovereignty, he says his goal is to “make sure that the players in the Arctic area, while talking about the environment, climate change and development, realise we are already there. This is not a barren country.”