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TL;DR:

What’s this about:

• Critical Minerals’ October 2025 watershed moment and its impact on innovation

• Project Vault as a potential market-making move for startups

• Who knows, maybe your linkedin feed will soon be flooded by entrepreneurs going into mining innovation

Big Week for Critical Minerals

Last week was a big week for Critical Minerals at the best party in town, the 2026 Critical Minerals Ministerial:

Naturally, the Ministerial generated plenty of headlines and there was no shortage of announcements and deals: FORGE, Vault and a host of bilateral deals took center stage as US leaders took to the podium.

Equally naturally, there were plenty of takes by the broader community. Some of my favorites include:

✍️ gave the broader geopolitical context of the Administration’s moves

✍️ provided historical context of stockpiles and provided a helpful analytical framework to think about Vault

🖇️ Ashley Zumwalt-Forbes talked about the different aspects of Vault and its comparison to the Strategic Petroleum Reserve

🌐 Dr. Gracelin Baskaran released an overview of Vault

Vault, the $12B critical mineral stockpile that was announced created waves and was at center of attention, with good reason.

I also became somewhat obsessed with it, but for a different reason than most takes out there. I think it is a prime example of how geopolitics reshape tech and venture.

Before we get into Vault and what it means for startups, let’s take a look at innovation for critical minerals.

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Throwing Innovation Out There

We’re still in the early days of the Western response to China’s dominance over critical minerals. In this multidimensional game of mineral chess, not all pieces were moved.

FORGE, Vault and other tools are just the opening plays. So far, Vault seems promising, though there are many open questions.

One thing is patently clear: The US and its allies are increasingly willing to make market-moving plays and are willing to invest to catalyze the private market into action. Some scholars argue that Vault is a move that is trying to out-China China, but I don’t think so. I think this is move plays exactly to the strength of a superpower that shaped a world order based on private power.

Governments made their move (at least for now). The question is: Are venture investors listening?

Innovation as a Critical Lever

Innovation in a critical piece of the puzzle. New technologies have the power to reshape geopolitics (Internet, Social Media and AI are prime examples). In the mineral context, there are some interesting examples of innovation:

• AI-enabled exploration and mapping

• AI-enabled separation method discovery (like AI Drug Discovery but for mining)

• Advanced Drilling and Mining Capabilities

• Advanced recycling and reprocessing methods

• Mine operation digitization (robotics, autonomous drilling)

• REE alternatives

Just like with regulation, the term innovation is often thrown out there without discussing where it will come from, what the roadblocks are and how can we lift them.

There are many sources of innovation, from startups to corporate R&D. The problem is: time. Or, more likely, lack of it.

That is why venture-backed startups are probably the most important type of innovation, with their ability to move and break things.

Venture-back startups require venture capital, and investors are often not too keen on investing in complex, traditional, capex heavy industries, ones that are prone to geopolitical and operational risks.

Geopolitics is Not Only a Risk

There’s a tendency to look at geopolitics as a risk factor. We often ask if an industry is prone to geopolitical disruptions (be them economic, military or social). But Geopolitics is not only a risk, but can also revitalize or reshape an industry. For example, geopolitical realignment, heightened great power competition and resurgence of conflicts (primarily in Ukraine) led to a surge in defense expenditures, which led to a wave of investments in new defense startups1.

By the same token, I believe that the Export Controls levied by China in October 2025 on rare earths was a watershed moment that is sending ripples through time, while catalyzing new market dynamics.

I believe this watershed moment will be met by a world eaten by software, AI agents and robots. They will eat critical minerals with the same enthusiasm with which they devour any other industry. To be clear, software will not eat minerals, but the supply chains they rely on, from mining operations to refining. There are already companies leveraging AI for exploration.

Yes, critical minerals innovation is engulfed by difficulties, roadblocks and market failures. There are reasons why traditionally there was scant interest in innovation in minerals. Tech was mostly not interested.

But, the shockwaves of October 2025 will change that, thanks to the renewed focus and global interest in the geopolitical moment we’re in, one where China is the defacto mineral czar of the world.

The logic is pretty simple:

• The renewed interested yields, and will continue to yield, market-making moves by the US and the West, which will mean national-scale budgets funneled to recreating mineral supply chains.

• Meaningful capital flows, increased demand for minerals and enhanced demand for better ways of doing things will create a market opportunity at a scale meaningful to attract venture investors, looking to enter new industries.

• Venture investors will start signaling to innovators that there is a meaningful opportunity. They will do so with conferences, events, annual letters, incubation programs and, well, podcasts.

• Entrepreneurs will take the hint and will move to apply general-purpose technologies and specialized innovations to critical minerals

• A feedback loop will be created, and the ecosystem will form

We’ve seen this happen before: ClimateTech venture funding surged after the IRA signaled hundreds of billions in sustained policy support. DefenseTech saw the same pattern when Ukraine demonstrated the ROI of autonomous systems and Washington opened the checkbook.

Massive government spending creates conviction that the market is real, which gives VCs permission to deploy capital into categories they previously ignored.

Granted, Critical Minerals are not Defense. But they are similar enough for us to pay attention.

Both face long development cycles, have national security framing that justifies non-market pricing, and concentrated customer bases where government demand can overcome early-stage financing gaps.

Defense startups’ product market fit received a boost from Pentagon purchasing. Critical mineral startups face the same dynamic: if Vault and similar initiatives signal sustained government procurement, the risk calculus shifts quickly.

Arrival of Tech

Tech hasn’t “arrived” yet for critical minerals.

You can feel the vibe shift when tech "arrives". You can't miss it: Conferences, podcasts, meetups, linkedin posts. You know when tech arrives when you almost wish it didn't.

That didn’t happen yet, but I have a feeling that at some point we will start seeing things like this:

Jumping into the Vault

To get a sense of what kind of market-making initiatives are coming for Critical Minerals and what they might mean for startups, Vault is an instructive example.

Vault, like the name suggests, is a stockpile of critical minerals that was announced by the Trump Administration:

Vault is a stockpile. Like its name suggests, it is meant to buy minerals deemed by the US as critical2 for a rainy day. Judging by the happenings of October 2025, that rainy day just might show up sooner rather than later.

How does Vault work? Well, Vault isn’t an actual vault. It would be funny if it was, thought. At any rate, it is a $12B public-private partnership that is intended to buy and store minerals and provide access on pre-agreed prices.

The brunt of the financing comes from the US Export-Import Bank (~$10B), with the rest ponied up by corporate backers like GE Vernova and Boeing, as well as private investors. Participants can draw minerals when a major disruption occurs at a pre-agreed price.

Yes, it’s kind of like a Strategic Petroleum Reserve, but for minerals. Yes, I wish it looked something like this:

Why Do We Need Vault? Well, because of China. This reserve is supposed to curb China’s dominance by allowing participants with a buffer in face of exogenic shocks. What those shocks could be? Aside from plagues, export controls come to mind.

Vault, at least in theory, will allow participating companies (all from Allied countries) to gain access if China decides to pull the plug.

Is Vault perfect? I mean, who/what is?

$12B won't rebuild entire supply chains that China spent decades dominating. But that misses the point. Vault isn't trying to replace Chinese capacity overnight; it's creating proof that Western buyers will pay for non-Chinese supply at scale. As explained by a recent CSIS analysis:

Participating manufacturers do not receive access for free. Instead, they make long-term commitments to the program and pay a commitment fee in exchange for access to specified materials during market disruptions.

That credible demand signal is what unlocks private capital. Think of it as a down payment that makes the rest of the fundraising possible, not the full purchase price.

There are even more uncertainties and many open questions (here are a few of the important ones). In general, stockpiles are a great tool to buffer from disruption, but will not likely reduce dependency on China, which currently refines upwards of 90% of critical minerals and rare earths.

Vault’s consequence for startups and innovation is monumental.

What does Vault mean for Startups?

Startups fuse together entrepreneurial fervor and intensity, new technological solutions to old problems and lots of cash. To grow, they need plenty of things, but it boils down to clients and money.

As we’ve explored above, the key issue is that majority of venture investors have an aversion to risky, uncertain markets that are exposed to geopolitical risks at the magnitude of, well, China. China’s dominance, along with how would-be customers behave means that critical minerals, from mining to refining to integration, is mostly considered not worth the risk.

Institutional investors often have the opposite problem: They won’t shoulder the tech risk that is the bread and butter of startups.

Vault has the potential to change this.

In short, Vault provides startups with:

• Offtakes and price stability

• Streamlined go-to-market channels

• Market Signal (“this is real”)

• Pickaxes and Shovel Opportunities

We’ll take a look at each one separately, but also recognize the uncertainties.

Offtakes

What’s this: Offtake agreements are where a stockpile like Vault becomes a lifeline rather than a headline. If a startup knows it can sell a defined slice of future output at an agreed price into a government‑backed buyer, it suddenly has something concrete to show a bank or a fund instead of a pretty slide about “total addressable market.”

It doesn’t mean the startup gets to walk away scot-free, but investors usually look at offtakes as bankable revenue that can anchor project finance and bridge the terrifying gap between FOAK and scale.

Streamlined go-to-market channels

Most young companies in mining, refining, or materials learn the hard way that their problem is not just chemistry or geology, it is go‑to‑market. Industrial buyers are fragmented, conservative, and slow, each with its own specs and legal boilerplate, so sales cycles are measured in years, not quarters.

By aggregating demand from large players and standardizing some of the terms, Vault can act as a pre‑configured channel: if you qualify once, you effectively plug into a pool of customers instead of courting each one from scratch.

Market Signal (“this is real”)

For investors, the existence of Vault is as much a political signal as it is a procurement mechanism. When the U.S. government lines up $12B, export‑credit backing, and marquee corporates around critical minerals, it tells LPs and strategics this is not a passing fad that dies with the next headline cycle.

That does not guarantee any given startup a ticket, but it lowers the “policy rug‑pull” risk that has haunted the space and makes it easier for funds to underwrite multi‑cycle theses in mining, refining, and upstream materials.

In ClimateTech, the Inflation Reduction Act helped accelerate the development and commercialization of batteries, green steel and even solar and wind and brought much energy into venture investments.

Pickaxes and Shovels Opportunities

Finally, a stockpile on this scale creates an entire layer of “pickaxes and shovels” where founders never have to touch ore themselves. Someone has to build the logistics software, inventory management, quality tracking, cybersecurity, and recycling systems that keep a distributed reserve of sensitive materials secure and efficient.

These innovations tend to show up after major crises take place or in the wake of major technology disruptions. We’ve seen this playout with Cybersecurity, which has expanded from “pure play” into particular industries: First it was OT security; then, it was healthcare, and now we are starting to see verticalized cyber solutions for utilities.

What makes this different from selling software to existing mining companies? Scale and coordination. A distributed stockpile across allied nations requires cross-border tracking, real-time quality assurance between dozens of facilities, and provenance verification that no single mining operation has ever needed. That complexity creates greenfield opportunities where incumbents don't have entrenched solutions and startups can set the standard.

Taking Stock(pile)

Vault provides 4 distinct advantages to startups, Granted, there are uncertainties with each one: Offtakes still need to be better defined; market signals takes time; venture might be slow to respond; and not all verticalized offerings find a real market. We’ll have to see how they develop over time.

However, the bigger picture is more important, especially since Vault is not the end-all-be-all move. We can expect more market-making moves and initiatives that will be announced in coming months and years. Each one of the moves doesn’t have to be perfect, but rather help catalyze the market.

The US is not alone in this. We can expect Europe, Canada, Japan and other countries to announce their own initiatives, stockpiles or otherwise. They might appear in country-by-country form or in a Middle Powers amalgamation.

They can come in the form of more stockpiles, Buyers’ Clubs, Government Incentives or even regulatory requirements. Like with DefenseTech or ClimateTech, it is likely that the massive shifts that are taking place “thanks” to October 2025, the AI-ification of everything and geopolitical realignment more broadly will lead to more venture investments.

We should hope so.

I’m already looking for the Linkedin posts.

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TL;DR:

President Donald Trump was busy while I was on vacation: Threats to annex Greenland (and then making a U-turn), establishing the Board of Peace, forcing PJM to auction record amounts of tenders and many more things.

My takeaway is, of course, never to go on vacation.

Still, it looks like the show at Davos was stolen by none other than Mark Carney:

Mark Carney’s speech at the World Economic Forum (Davos) took the Twittersphere by storm. Within minutes, a flurry of takes flooded the internet, followed by a SubStorm of analyses. I can’t blame them - by all respects, Carney’s speech was eloquent, refreshing and powerful.

Most commentators from all ends of the spectrum mostly focused on his announcement that the rules-based order is gone. For example:

I think that most of the commentary focused on the wrong part (or, the less interesting one).

The more interesting part, in my view, is Carney’s prescription to what comes next, after we’ve passed the rules-based international order. Spoken like a true Canadian, instead of spewing fire, Carney politely offers Middle Powers a way forward that isn’t a binary choice between US and China.

Carney’s speech is packed with issues to unpack - from the rupture to liberal values and cooperation in a fragmented world and I do not intend on covering everything. Instead, I will focus on Carney’s recommendations for Middle Powers and what they can do to keep their autonomy, while not paying too high of a price.

Buyers Club in a Fragmented World

The prescriptive part of Carney’s speech is as simple as it is refreshing:

In a world of great power rivalry, the countries in between have a choice: to compete with each other for favour, or to combine to create a third path with impact. We shouldn’t allow the rise of hard power to blind us to the fact that the power of legitimacy, integrity and rules will remain strong if we choose to wield it together.

…

Collective investments in resilience are cheaper than everyone building their own fortresses. Shared standards reduce fragmentations. Complementarities are positive sum. And the question for middle powers like Canada is not whether to adapt to the new reality – we must. The question is whether we adapt by simply building higher walls, or whether we can do something more ambitious.

In other words, Carney suggests that instead of building fortresses in a fragmented and lawless world, they should form flexible and topical associations to fix specific issues.

Instead of signing grandiose proclamations and complex global treaties, “middle powers” should look to formulate more focused arrangements that can solve problems, while aggregating supply, demand or bargaining power.

The important question is - how?

Carney’s answer: Join a club.1

Join the Club

International clubs were always around, we just didn’t give them much attention. They are useful instruments to deal with specific issues that matter to a group of countries, or where specific coordination is required.

What all clubs have in common is that they are:

• Closed to a set group of like-minded countries2

• Enable coordination on a specific topic

• Enable collective bargaining power and aggregation of supply or demand

• Great for your skin

Examples of clubs in the international arena abound: OPEC, G7/20, Pax Silica and the EU are types of clubs. Even the Arctic Council is a form of a club.

Not all clubs are the same. While there are probably more than three types of clubs, we can think of three primary types that countries like to use:

• Demand Aggregators: Clubs that are used primarily to buy in bulk and provide better terms for their members. This is a similar dynamic to what happens in the private market. For example, G7’s Critical Minerals buyers’ club.

• Price-Setting/Producers: Clubs by countries that produce something, using their status to coordinate prices and prevent a race to the bottom or price competition. The most notable example is OPEC, of course.

• Governance: Clubs that exist to create standards, regulatory regimes or create joint governance frameworks on a topic of collective importance. For example, the Arctic Council or the EU (at least in some respects)

In practice, each one of these clubs uses different mechanisms to achieve a goal. Mostly, it is to either promote a topic (say, decarbonization) or secure an advantage for its members (say, better prices).

For example, Demand Aggregators can provide favorable terms to suppliers or guarantee sufficient volume worth their while. In energy, club members can guarantee project developers sufficient offtake agreements3 from enough actors to make a project both economically viable and bankable.

Governance clubs can set standards for an industry or for behavior. The Arctic Council rules by consensus, setting a standard that countries cannot make unilateral decisions about the region and should work in unison with other Arctic nations:

Clubs In the New World Order

Clubs have existed for a long time and have served countries for multiple purposes. In a world that is governed by the rules-based order we all know and love, the formation of clubs is not seen as a breakaway from the mega-club that is the world order, but rather a club-within-a-club (like a nesting doll).

Now that this order is breaking down (at least, that is what everyone is saying, so it must be true), the general tendency is for each country to align itself with a hegemon (US/Russia/China and maybe even India).

In this kind of world order, it is assumed that smaller countries have to abide by the will of the hegemon. It’s the geopolitical version of My Way or the Highway.

Clubs, in essence, can help create an alternative for middle powers, like Canada:

But I’d also say that great powers, great powers can afford for now to go it alone. They have the market size, the military capacity and the leverage to dictate terms. Middle powers do not.

But when we only negotiate bilaterally with a hegemon, we negotiate from weakness. We accept what’s offered. We compete with each other to be the most accommodating.

Carney’s approach is particularly refreshing, compared to majority of accounts that spell the rise of Great Power Rivalry. Carney’s approach:

• Provides us with a third way (spheres of influences vs. lawlessness and global anarchy)

• Creates a more modular and nuanced world order, one that is ruled by power, but is offset by ad-hoc coalitions that come together based on shared interests and values

• Gives analysts more stuff to write about

Middle powers are the primary beneficiaries from Carney’s speech. They are the ones who will use clubs to fulfil their goals and gain benefits, while creating alternatives that can be leveraged in dialogue with their hegemon. Canada, for instance, can use clubs to gain enough leverage to meaningfully negotiate with the US and therefore maintaining their sovereignty and autonomy.

The interesting aspect of Carney’s approach is that while clubs seem like a collaborative effort, in Carney’s approach it is meant to provide members with strategic autonomy, while maintaining values and liberties. In fact, Carney’s call for a more collaborative world rests on the assumption that going at it alone makes no sense from the individual perspective of middle powers. They simply cannot go it alone, in his words.

Now, let’s look at two particular examples: Energy and Critical Minerals.

Renewable Energy

Carney briefly mentioned Energy as an area for middle power collaboration.

While his track record with clean energy is far from perfect to say the least, Carney can create a buyers club that will aggregate demand and provide significant offtake agreements to renewable developers.

In practice, this club would issue joint tenders for wind, solar, storage or nuclear, provide incentives to developers and provide long-term contracts to suppliers in larger volumes than any one country can sustain. In exchange for the bankability and proven demand developers need to keep investing, club members can gain better prices and more leverage over how their counterparts behave.

Canada can also choose to take the governance path and work with other Middle Powers to set standards for Carbon Credits, Methane or other topics of collective interest that require coordination to achieve progress.

An energy buyers’ club would improve the strategic autonomy of its members by setting up more durable avenues to procure energy at more favorable prices, and would also prevent reliance on powers like Russia, US or China.

On renewables, Canada is stuck between a rock and a hard place: Washington is leaning on allies to keep fossil fuels in the mix, while Beijing’s massively subsidised clean‑tech machine now supplies over 80% of the world’s solar hardware and can undercut Western panels by half.

A buyers’ club would give Canada and its peers a third option: Jointly commit to volumes of clean power and equipment from a more diversified set of suppliers, and use that pooled demand to negotiate standards and prices that don’t leave them dependent on either camp.

Critical Minerals

Critical minerals are everyone’s favorite topic.

Carney referred in his speech to the G7’s Buyers Club on critical minerals, led by Canada. This club is meant to guarantee demand, set price floors, and co-invest in projects to counter China's dominance. Already, Canada committed to a $6.4B CAD, G7-backed package for 26 critical minerals projects and long-term purchase commitments and price floors.

This Buyers’ Club is somewhat similar to the US Mineral Strategy I covered just a month and a half ago:

China’s dominance of rare earth elements and many of the important critical minerals allows it to manipulate prices, flood the market and destroy competition. China also has an advantage in its ability to integrate minerals into final products thanks to its developed production ecosystems (e.g., rare earth complexes in Baotou, China).

In contrast, the majority of countries cannot afford to guarantee price floors in volumes that would move the needle or establish processing facilities at a scale that can allow them to break free from China’s hold on minerals.

In fact, the similarity between the US strategy and the G7 Club proves Carney’s point: Great Powers can do it alone; Middle Powers need clubs.

What would a Buyers’ Club give Canada? It would enable member countries to develop their own collective ecosystems, ensure that their industries can withstand price manipulation through price floors and incentivize new facilities. In other words, it can help a collection of companies adopt strategies that so far have been reserved for Great Powers.

Think of a Canadian nickel mine and refinery that only gets financed because a group of G7 governments guarantees a long‑term floor price for a big chunk of its output.

Another example could be club financing of processing hubs in friendly jurisdictions. For example, G7 governments can take a minority stake in processing plants or finance the establishment of a new one, so the ore doesn’t have to sail to Baotou to become useful. This is not too different from what the US is doing on its own over the past few months.

Clubs and Their Discontents

Carney’s approach is refreshing and powerful, but not without its faults.

Clubs have significant drawbacks and plenty can still go wrong:

• Clubs can backfire: Pissing off hegemons is a tricky business; using clubs to hedge and build alternatives can easily trigger retaliation from the hegemon near you, whether through trade measures, regulatory pressure or security “reassessments.”

  

• Clubs can still not be enough: In practice, it is brutally hard to diversify away from hegemons; even a G7‑scale buyers’ club is unlikely, on its own, to break China’s grip on critical‑mineral processing or rare earth separation anytime soon.

• Clubs are hard to operate: Setting standards and providing offtakes sounds great on paper, but it demands tight coordination, long‑term political alignment and a lot of boring implementation work; over time, operations are likely to matter more than ideals, values or even stated interests.

• Clubs can create bad power dynamics: Clubs are not democracies, even when their members are; power imbalances, agenda‑setting by the biggest players and winner‑takes‑most dynamics can turn a “middle‑power tool” back into just another hierarchy with better branding.

Looking Ahead

Carney’s vision of the future is not without its faults. There’s plenty to critique, from arguing against his view to blaming him of being a part of the reason we got here.

Still, Carney offers a real way that sidesteps the usual dilemma: US or China. Choose this or that.

I’ve mostly left out the values piece of his speech. I still think liberal norms are crucial for a prosperous, safe world, and clubs don’t magically guarantee them. There are illiberal clubs like BRICS, and Canada’s own deal with China is part of what set off the Twitter storm around Carney in the first place.

Even so, I still believe Carney offers a real way forward to maintain a form of the current world order, with clubs being a helpful instrument to keep some semblance of stability.

The Club approach can also provide some operational benefits compared to the complexity of multilateralism. Clubs, then, offer us a real way forward to better manage a post rules-based-order world.

Let’s hope he’s right.

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2025 is pretty much over, and you know what that means: A recap.

There is a quote I often use to try and impress upon those unfortunate enough to catch me in the musing kind of mood:

2025 was definitely a year when decades happened, and I count myself fortunate to be able to track, think and write about all that transpired. It was also the year I started seriously writing A World Reconfigured.

In the spirit of recaps, here’s mine: Personal reflections, 2025 recap, 2026 predictions and some of my favorite recaps!

Personal Reflections: I Started a Thing

I started this blog to tell stories that took place at the epicenter of a global rewiring of political, economic and human systems.

The world we live in is incredibly complex and nuanced, and it is impossible to tell every story. A theory of everything is more often than not a theory of nothing. So, I made a choice to focus on Climate Change as the key driving force that’s at the center of my coverage.

This year has been incredible on a personal level: Writing gave me an outlet for my thoughts and ideas. I’ve always been a macro kind of person, but never had a platform I felt all too comfortable with. This year has changed it for me.

In more ways than one, I cannot seem not to do it. I am excited (and also a bit terrified) about what I see out there:

This blog also helped me reduce my AI anxiety. The constant tinkering, generating and experimenting with AI made me more confident about the coming future and my role in it.

I feel like this year I’ve found my voice, and I’m excited about continuing to shape it in 2026.

So, before we go any further, I want to thank every single of one of you for reading this newsletter and for putting up with my nonsense being a part of my journey. I hope to continue and grow this community in 2026!

Ok, let’s dive right in!

2025 Recap + 2026 Predictions

Throughout the year, we explored many different fronts: from the Arctic to the US to China. We covered geopolitics, policy, climate investments and technology.

It would be impossible to mention everything that took place, but here are some of they key developments this year that caught my eye, and are likely to keep us busy in 2026:

US Policy Does a-180

Perhaps the turning point of the year – and maybe of the decade’s second half – was Washington’s whiplash on climate and energy. The Trump Administration rewired US policy around “energy dominance” (less climate, more energy), moving with startling speed to gut Biden-era climate and clean‑energy programs and even older protections.

What we’ve seen this year is a complete overhaul of the executive branch and some of the legislative basis of climate policy, from the Dept. of Energy to the Environmental Protection Agency to NOAA to National Renewable Energy Lab. We have also seen aggressive action against solar and wind (wind was especially hit hard).

And yet, even the speed and scale of the Trump offensive against climate policy cannot reverse the expansion of renewables, both globally and in the US.

Record demand for energy made utilities, Hyperscalers and corporates take the “All of the above” approach extra seriously, inking many renewable deals. Some markets don’t care very much about the federal tune. For example, in Texas, solar and batteries generated record energy this summer.

To put it in Galileo’s words: E pur si muove (“yet it moves”)1

🔭In 2026, I don’t think anything will change on this front. If anything, the Trump Administration will continue to unravel climate policy and advance what it sees as Energy Dominance. At the same time, it’s likely that renewables will continue to expand, especially as demand for energy continues to grow against the backdrop of the AI boom.

The Arctic

In 2025, the Arctic continued to march towards becoming the new South China Sea.

As the region is heating faster than anywhere else on Earth, permafrost thaw and dramatic ice loss continue to open new sea lanes and invite talk of mining (though not everyone agrees). In response, Arctic nations and non-Arctic states are making moves to further their interests, causing a shift from cooperation to tense coopetition.

The growing tensions in the Arctic were central to my coverage this year (ok and in late 2024):

Here are a few highlights of the year:

The US openly eyed Greenland as a geostrategic asset, to the growing alarm of Denmark and pretty much everyone else:

Russia has signaled in more ways than one that it intends to focus on the Arctic in coming years, while continuing military buildup in the region (including building floating ice bases) and preparing for hybrid warfare over Svalbard

China kept its partnership with Russia alive and showed no sign of abandoning the Polar Silk Road concept:

NATO stepped up exercises and presence in the High North, largely in response to Russian and Chinese assertiveness.

Countries like Norway, Denmark and Finland updated their security doctrines to reflect the Arctic’s shift from quiet periphery to front‑line theater.

🔭 In 2026, I expect we will see more of the same: power will keep reconfiguring as states move to leverage their Arctic advantage, and actors like Russia will keep testing the edges with shadow fleets and gray‑zone tactics along newly thawed routes.

I suspect we will see a bit more Arctic maritime traffic, especially around the Northern Sea Route. On resources, not so fast: despite the hype, the Arctic’s brutal conditions mean most projects will remain aspirational for years, and that’s probably for the best.

Arctic governance will continue to function on the surface, but underneath it will continue to fray. As more countries join attempts to take advantage of the region, we will likely see more bilateralism and alternatives to the Arctic Council.

On that note, will we see more countries jumping on the Arctic bandwagon? India, South Africa, Indonesia and Argentina in the Arctic? Sure, why not!2

I guess 2026 will be another hot year for the Arctic.

Critical Minerals and Rare Earths

In October 2025, thanks to the escalating US-Chinese trade war, China decided to turn up the heat on Rare Earth Elements export controls to 11. This move helped launch 17 relatively obscure yet important elements into global stardom.

This was the moment when the Western world - nations, companies and even everyday people - woke up to witness the outcome of nearly 40 years of disciplined Chinese industrial policy and Western negligence, resulting in almost complete dependency on China for rare earths, which are critical for anything from wind turbines to F35s.

In short, China found where it hurts, and it pressed on and on and on.

This moment also launched a flurry of deals, announcements, frameworks and agreements meant to counter China’s dominance. It also led to an emergence of a new US strategy:

The US and its allies are trying to achieve mineral independence, and they are investing like there’s no tomorrow. If they won’t, there might not be one.

It was not all that great for China. Inadvertently, China showed its hand and caused many countries to speculate whether China was in fact the adult in the room. In its willingness to weaponize export controls, China stoked fears in the hearts of countries and drove them into the arms of the US.

🔭 In 2026, I think we will see the US and its allies continue to rebuild its supply chains and their ability to achieve mineral independence. 2025 was a wake-up call for many countries, and I suspect they will try to realize their ambitions in 2026.

The US and its allies will try to continue to build more refineries like they announced in Romania and Saudi Arabia, to create more bilateral and multilateral frameworks like Pax Silica, and more. I will also not be surprised if we see more tech investments in new processes and recycling.

China is not likely to sit still. The more Beijing feels it is at risk of losing its edge, the more it can reach for price manipulation, tighter export controls and other familiar levers – and use BRICS and Belt‑and‑Road forums to build counter‑coalitions to the US‑led camp.​

It’s going to be an interesting year for rare earths.

China’s Ascent

It’s nearly impossible to write anything about the global environment without talking about China. There are better experts than meto review the year China had,3 but I did want to say something about the great red dragon.

With the US busy dismantling the very climate architecture it helped design, China spent 2025 quietly stepping into the gap. On climate, Beijing leaned hard into the role of “responsible adult” – deepening cooperation with the EU and Canada and using every COP/ministerial photo‑op to signal that it intends to stick around. And yet, it’s not clear whether China is serious about moving from talk to walk.

At home, China’s gargantuan industrial machine kept adding renewable capacity: it blew past 1 TW of installed wind‑and‑solar capacity and pushed further toward becoming a de‑facto electrostate, electrifying transport and industry while rolling out the next generation of grids, storage and infrastructure. Those who visited (not me!) were impressed.

Speaking on renewables, China exported clean energy worldwide: From solar panels and inverters to turbines, batteries and grid gear, it dominated clean‑energy exports and effectively underwrote the cost structure of the global renewable buildout.

🔭 In 2026, China will stay at the center of any serious conversation about climate and energy, but the pace of new build may start to slow as economic and financial headwinds bite.

The question is not whether China remains important – it will – but whether it can keep scaling at 2024–25 speeds in a shakier domestic economy (I think it’s unlikely, but what do I know anyway… 🤷‍♂️)

Data Center Wars

Data centers were impossible to avoid in 2025. Everywhere you went, it seems like there’s someone screaming “data centers!!!!” at you. And with good reason. Sometimes it seems like it’s all anyone is talking about:

As build‑out exploded, so did the backlash: Concern over power prices, water use and mistrust of AI turned local communities against new projects, slowing or blocking sites across the US and popping up in Europe and elsewhere too.

In the US alone, a Data Center Watch report found that:

$64 billion in U.S. data center projects have been blocked or delayed by a growing wave of local, bipartisan opposition. What was once quiet infrastructure is now a national flashpoint — and communities are pushing back.

Of course, politicians were quick to join the fight, with key special elections being won on anti-data-center rhetoric and even a national moratorium suggested by one Bernie Sanders:

By year’s end, it was simply harder to get a data center approved in the US than almost anywhere else.

🔭In 2026, we will continue to see a version of the Data Center Wars, especially in national discourse.

That doesn’t mean that new data centers will not be built. I believe it’s more likely that at the local level, operators will learn to work with communities and adjust their plans to be at least somewhat compatible with community needs.

It’s likely that operators will become more sophisticated and effective with community outreach and dialogue. There’s just too much at stake for them not to take communities seriously.

Will communities learn to trust operators and developers? I guess we’ll see.

Europe’s Dilemmas and Climate Aspirations

I spent a lot of time following Europe’s climate cha-cha.

The year started off strong, with the European Commission making headlines with its ambitious 90% reduction target by 2040.

But with mounting political, geopolitical, economic and social pressures, Europe started dancing to a strange tune: one step forward, half a step backwards.

Since then, Brussels has managed to water down key policies like the combustion‑engine phase‑out, delay implementation of the EU Deforestation Regulation and padded major texts with just enough ambiguity for future politicians to slip out of today’s promises, all while signing a suspicious number of feel‑good declarations.

Member states added their own chaos. From Sweden rolling back climate measures to countries balking at heat‑pump and air‑con rules, “Europe” looked less like a single climate project and more like 27 different domestic fights playing out under one banner.

Some of my coverage this year focused exactly on this:

At the same time, there were some good things. Norway, for example, did something great with Northern Lights:

In 2026, I think the EU will continue to walk a tightrope between climate ambitions and difficult realities, as it faces a growing set of dilemmas: Social unrest and the rise of the far right; A hostile US, an aggressive Russia and an assertive China waiting around the corner; Rising energy prices and industrial decay.

I’m sure Europe is serious about being the world’s climate leader. But the more pressing question is: can it?

We’ll find out as Europe dances 2026 away!

Looking Ahead to 2026

There are plenty more things I looked at this year, and many more topics that took part in the reconfiguration of our world. Most of them will likely persist in 2026, even if they might take new shapes.

Here are some things I will be paying close attention to (unless other things will keep me busy):

👉 India: A superpower in the making, India’s activities in the climate scene are still relatively minimal, but I suspect we will see more in 2026, as its renewable sector is growing and climate is a great arena for geopolitical flexing. I will be following Modi and his crew very, very closely.

👉 Insurance: 2025 was already a tumultuous year for insurance companies. Many, thanks to the growing intensity and frequency of climate disasters, are reducing coverage in riskier areas and others are exiting markets entirely. In 2026, we are likely to see more and more of them. I will be looking to see how the industry reconfigures and realigns to this new reality.

👉 Electrotech: The growing electrification of everything is giving rise to a new hard and soft tech stack. It would be interesting to see how the growing electrification of our daily lives and our industries will have significant impacts on supply chains, innovation and basically everything else. China will likely be a beneficiary of this as both an advanced Electrostate and an exporter of electrical equipment.

👉 ClimateTech and Industrial Rebuild: Even with headwinds and a Greenlash, climate tech moved from “tourism” to putting serious steel in the ground. As Europe, APAC and the US grope toward industrial policy 2.0, 2026 will offer plenty of chances for genuinely clean technologies to scale, or fail loudly trying.

Talk of the Town: The Recap Edition

End of Year is always a time full of recaps, so I collected my favorite ones:

✍️ provided her recap and predictions of the Mineral sector.

✍️ recapped climate investments

🖇️ CTVC’s 2025 unwrapped

✍️ covered the funniest and worst takes on AI this year

Thanks for reading! If you enjoyed this edition, don’t forget to subscribe or share your thoughts. 🔽

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See you next week!

A new cold war has emerged - not about satellites, data centers of even AI chips. It’s about the minerals that enable our modern economy: Rare Earth Elements (REEs/rare earths).

Over the past few years, and especially in recent months, US‑China rivalry has turned critical minerals and REEs into a central front in the broader power competition.

This growing conflict is oriented around a few facts:

• China is the de-facto ruler of the REE industry, controlling roughly 70% of the mining and extraction segment, and over 90% of the refining segment.

• Beijing is increasingly willing to weaponize that position to advance its geopolitical agenda.

• Rare earths (and critical minerals) are perceived today, more than ever, as a critical component of National Security1

• The US and its allies are rushing to break free of China’s chokehold over REEs, in what sometimes seems like a frenzy to make deals and sign agreements

Given a flurry of deals and announcements made by the US and its allies, there’s one big question that’s on everyone’s mind: Will it work?

CFR’s argues that two constraints define the challenge of reducing dependence on China: time and money, accumulated over decades of Chinese investment, IP building, and global mine control.

A Crude Look at the Whole

Over the past few months, the US has rolled out a flurry of investments, agreements, and deals to counter China’s dominance over rare earths. At first glance it can look like a chaotic frenzy, but there is actually a deliberate structure underneath.

Instead of moving one tool at a time, Washington is running a six‑layer, multipronged strategy that plays to its structural advantages:

Defense authorities (DPA, Office of Strategic Capital), export finance (Ex‑Im and DFC), executive orders, alliances, capital markets, and financial instruments like loans, guarantees, and offtake agreements.

Taken separately, these moves buy time and money; together, they offer a real shot at loosening China’s grip and edging toward mineral independence.

6 Degrees of Separation

Let’s review the current US playbook for breaking free of China’s chokehold:

Layer 1: Financial De-Risking

TL;DR: Financial de‑risking unlocks private capital, but it still puts real - if smaller - costs on US taxpayers.

What’s going On: China uses its control over the industry to manipulate prices and create artificial surplus of REEs to bring prices down. This in turn makes it hard for private companies to compete, often sending them into bankruptcy. To develop a US or allied industry, private firms will need guarantees and protections.

The US has engaged in a few interesting tactics to de-risk investments:

• Price Floors: Everyone remembers the 15% equity stake in MP Minerals. But what was interesting in this deal was the $110/kg price floor

• Letters of Intent: Using the Export-Import Bank to provide letters of intent of $2.2B to Australian companies to catalyze $5B worth of investments

• Loans: Using the DPA, the US government can provide loans

These tools provide US companies with the guarantees they need to make long-term plans and investments and protect themselves against Chinese market interference.

Layer 2: Bilateral Agreements

TL;DR: Bilateral deals jump‑start private investment while shifting much of the risk and heavy lifting onto partners

What’s Going On: The US can’t do it alone. It needs friends and allies to overcome China’s gargantuan foothold.

The US is leveraging its dealmaking flair to create a series of bilateral agreements to boost production and catalyze investments. These partnerships allow the US to overcome some of its own innate challenges, like permitting and environmental concerns and share the load of buildout required to stand up refining and separation operations.

Examples:

• Australia: $8.5B initiative with $1B from each nation

• Saudi Arabia: 49% Department of Defense stake in new rare earth refinery with Maaden and MP Materials,

• Japan: Critical Minerals Supply Security Rapid Response Group, mutual stockpiling, $2-3B combined investment target

Layer 3: Defense Procurement to Make Markets

TL;DR: Defense procurement turns the Pentagon into an anchor customer, catalyzing private investment while ramping up domestic production

What’s Going On: To help US and US allied companies compete with the Chinese decades-old head start, the US government deploys its own defense apparatus to kickstart the market. The Pentagon and Dept of Defense/War are centrals players.

Examples:

• Long-Term Offtake Agreements: As in the MP Materials example, the DoD/W acts as a contract guarantee, allowing companies to take that to the bank. This is a similar dynamic to what we see in the Renewables market, where Hyperscalers often serve as Offtakers to help First of a Kind factories receive funding

• 2027 DFARS Regulatory Cliff: January 1, 2027 ban on Chinese rare earths at ANY stage of defense platforms forces defense contractors to qualify alternatives now

• Strategic Stockpiling: With $1B+ in new National Defense Stockpile acquisitions, the government is able to, once again, guarantee demand and help de-risk investments

Using the state apparatus to help de-risk the market is similar to layer 1, but also different. In layer 1, the US is investing and acting as a financial actor. In layer 4, it uses its power as a purchaser and a customer.

The DPA is the main tool here, letting the government channel funding and priority support to private projects on national security grounds.

Layer 4: Multilateral Coordination

Bottom Line: Multilateral deals are slow and rare, but they deepen coordination with allies and give the US more geopolitical weight to counter China

What’s Going On: Bilateral deals only go so far. Standing up a truly resilient supply chain requires multi‑country frameworks that coordinate investment and standards, even if they are slow and messy.

When it comes to mineral independence, the Administration is the first to join forces with other like-minded countries, often framing the enthusiasm as “America First”.

Examples:

• Pax Silica: A multilateral partnership between the US 6 other countries designed to “partner on securing strategic stacks of the global technology supply chain”. This includes critical minerals, and, you guessed it - rare earths.2

• G7 Critical Minerals Production Alliance: Coordinates investments among G7 nations while respecting existing bilateral deals, mobilizes private capital​

• G7 Critical Minerals Action Plan: Standards-based markets countering non-market policies, transparency and traceability roadmap

While not strictly multilateral, the Administration’s usage of international institutions is also striking.

Layer 5: Domestic Industrial Policy

TL;DR: Domestic industrial policy is essential for real mineral independence, but it will be slow, messy, and can’t be fixed with a few executive orders.

What’s Going On: Even with friend‑shored refineries, the US needs more domestic production to get close to mineral independence. However, permitting, local opposition, and politics make that hard. The administration is leaning on national security directives, the DPA, and Trump’s favorite: Executive Orders.

Examples:

• US National Security Strategy: “The United States must protect… This means ending (among other things): Threats against our supply chains that risk U.S. access to critical resources, including minerals and rare earth elements”

• EO 14154 (January 20): “Unleashing American Energy” mandating robust National Defense Stockpile​

• EO 14241 (March 20): Streamlined permitting plus DPA authority delegated to DFC, federal lands prioritized for mining​

• EO 14272 (April 15): Section 232 investigation on critical mineral imports launching tariff and import restriction assessments​

Using EOs helps solve problems, but it’s no panacea. It will take a long time until the US can accelerate buildout to stay on par with China.

Again, the DPA plays an important part of promoting domestic production capacity, allowing the government to override standard market signals, which are often impacted by China’s actions.

Some projections have the US sourcing around 90% of domestic demand locally by 2040, a monumental lift.

Layer 6: Innovation & Circularity

TL;DR: Innovation, recycling, and using fewer rare earths are the only real levers the US has to chip away at China’s technology and IP lead.

What’s Going On: At the end of the day, China is a few decades ahead, and much of the competitive advantage is not in the buildings and facilities they have, but rather the IP: It’s the ability to separate, process and refine REEs.

To get ahead, the US can choose three strategies (or all of them):

• Pathway 1: Urban Mining: Turning scrap into a strategic asset. By scaling recycling for magnets and motors, the US creates an “above-ground mine” that offers faster access to materials than opening new pits

• Pathway 2: Next-Gen Processing: The US can invest in next-gen technologies that will leapfrog ahead of existing Chinese impact

• Pathway 3: Use Less REEs: One way of innovating its way out of this mess is to develop industrial products that are not as reliant on REEs as they are today

All three paths are viable, but they will need sustained R&D funding and a mini industrial policy focused on advanced materials and recycling.

Playing to Your Advantage

What I find particularly interesting is that Washington is not trying to, and probably cannot “out‑China” China on centralized command and environmental tolerance; Instead, it is leaning to what it already has:

• Advanced R&D: World‑class labs and companies to push new processing technologies, recycling, and material substitution.

• Market Making & Regulatory Powers: Using DoD/W, Ex‑Im, DFC and the DPA to act as anchor customer and financial backstop

• Leveraging Global Architecture and Alliances: Leveraging NATO, the G7 and wider treaty networks to share the build‑out burden and require major defense contractors to get off Chinese inputs.

What Could Possibly Go Wrong…

Plenty. This is a complex strategy that requires many moving parts to work together in harmony, or at least not to get in each other’s way. It must also reduce the US’s dependency on China, whatever that means.

Still, it would be helpful to breakdown what could go wrong:

• Investors Can Walk Away: US permitting and regulation takes a long time. Even with US guarantees, this can be too much for investors who expect returns.

• Chinese Countermeasures: Beijing can build counter‑coalitions and still flood the world with cheap finished magnets and components.

• NIMBY: Local opposition can quietly kill projects, as seen in other energy and infrastructure fights. Don’t believe me? Ask Microsoft.

• Traditional Failures: Projects can slip, overrun budgets, or fall short of the hype, and alliances can fray.

The Road Ahead

The real test of Washington’s rare earths playbook is brutally simple: does it actually bend the fundamentals of the market away from Beijing, or just generate headlines. Over the next decade, there are three scorecards to watch.

• Does domestic and friend‑shored production of oxides, metals and magnets actually come online at scale, or stall in permitting and price wars

• Does China’s leverage in trade and security talks shrink as buyers gain credible non‑Chinese options.

• Do US‑aligned firms keep investing downstream into magnets and components once the first wave of subsidies and guarantees fades.

If the US really plans to meet most demand locally by 2040, the next decade will show whether this playbook works. Western independence may hinge on it.

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Our journey throughout the frozen tundras of the Arctic is coming to a close.

In Part I of this series conclusion, we have introduced our methodology and explored two of the Arctic scenarios. Now, it’s time to set our sights on the other two!

As a reminder, our exploration of Arctic futures includes four scenarios with two axes of change: Climate change and global geopolitics.

In our previous part, we have explored possible futures that show what might happen if we cannot reign down climate change. Now, let’s set our sights to possible futures where climate change had a limited effect on our planet.

Yes, I know it’s not likely. Still, entertain me!

Green Resource Wars:

In our third scenario, humanity managed to stave off climate change’s worst impacts, yet nations still act like school children:

It's 2050, and you're monitoring a swarm of surveillance drones patrolling the disputed Lomonosov Ridge from the Nuuk Global Resource Command Center. The world has managed to limit global warming to 1.5°C, but this climate victory has triggered an unprecedented scramble for the Arctic's critical minerals—particularly Barentsium, the miracle element discovered in 2031 on the Barents Sea floor that revolutionized quantum computing and fusion energy. On your display, you track the movements of Russia's Arktika Resource Corporation vessels as they edge closer to the Norwegian-controlled extraction zone. Meanwhile, the Indian Arctic Initiative's ice-hardened ships escort a precious Barentsium shipment along the Northern Sea Route, carefully avoiding the militarized zones established after the controversial Greenland Partitioning Accords of 2035 divided the island between American and Russian control. Your mission is clear but nearly impossible: prevent a figurative (economic) war from turning into a literal (military) one.

Key Operating Dynamics:

Okay, let’s look at what’s happening in this scenario:

How Did We Get Here?

In this scenario, here’s how we got from 2025 to 2050, i.e. what happened that led to the Green Resource Wars:

While we want to keep things short here, I think it’s worthwhile to explore further what happened. Check out the footnote for a lengthier explanation of this scenario.1

Who Wins, Who Loses?

👍Winners include: Resource rich countries (Russia, Norway, i’m looking at you!👀); Tech and security companies; Indigenous communities with leverage (hey they now have their own military corporation…); Large countries with geopolitical power and resources (hey India, how’s it going?)

👎Losers include us, of course (what else…); smaller countries that lack access to the Arctic; the Arctic Council and international institutions; natural ecosystems subjected to rapid and aggressive mining (and lots of animals, too)

Clues From Today:

🔎 Russia's Arctic Forum 2025 in Murmansk emphasized Moscow's strategy to expand economic and military presence in the region, with Putin highlighting the Northern Sea Route as a key global trade corridor

🔎 Norway is looking to award seabed mining block licenses in 2025 in the Arctic region.

🔎 India has established a strategic partnership with Russia on the Northern Sea Route for commercial shipping and shipbuilding.

🔎 Brazil is positioning itself as a major player in the critical mineral space, growing in importance and influence.

Arctic Commons

Okay, okay, here’s the last scenario. This time, we’ve hit the jackpot: A climate disaster was averted, and we’ve also managed to keep our global institutions powerful (Don’t know about you, I think it’s a good thing overall)

It's 2050, and you're monitoring vessel traffic from the Arctic Council Coordination Center in Tromsø. Through the reinforced windows, you can see seasonal ice still covering much of the Arctic Ocean. You still remember that oil spill of 2028 that led, against all odds, to more collaboration between countries instead of less. The Arctic Council still retains its binding powers and its multinational military force, established in 2032, the same year when we have realized we actually have a chance to stave off climate change, if we just stop being selfish all the time. It worked. Your job is to make sure countries stick to their commitments, that scientists can freely conduct their missions and that the Arctic stays frosty.

Key Operating Dynamics:

Let’s take a look at the key dynamics of this scenario that are at play:

How Did We Get Here?

In this scenario, from 2025 to 20250 there were several happenings that took place:

Check out the footnote for more on how we got here.2

Who Wins, Who Loses?

👍 Winners include all of us; Arctic ecosystems and their inhabitants; Indigenous communities that are now “protected” by the Arctic Council; Scientists and researchers, who now can enjoy global support for their work; The Arctic Council, who’re now the boss 😎.

👎 Losers include commercial companies that “drill baby drill”; national militaries, who have one less thing to fight over; Nations in the habit of strongarming smaller countries.

Clues From Today:

🔎 The Arctic Council is still pretty much around. Despite the habit of kicking them around, they still pretty much run things.

🔎 Indiginous communities are gaining ground in establishing a voice and representation, as seen by Finland’s establishment of the Sami Climate Council

🔎 US and Russia are… collaborating? 🤷‍♂️

🔎 UN is still trying to get nations to collaborate, as will be discussed in May 2025’s Climate & SDGs conference

Finishing Touches

Our journey through the Arctic is coming to a close. I had fun, I admit.

My fascination with the Arctic started with a random story about Russia’s military expanding its presence in the region, and I couldn’t figure out why. I thought it was just a piece of Ice🧊. Oh, I couldn’t have been more wrong!

Throughout the past couple of months, we saw how the Arctic is on its way to become one of the world’s more unstable and contested regions, with once-collaborative countries becoming increasingly competitive.

If you have been following this series of deep-dives, like me, you probably have learned a few things:

• The Arctic is top of mind for many countries. Many of these countries don’t even have a territorial claim to the region, and are even thousands of miles away 👮

• No one is waiting around. Countries, companies and even non-profits understand that the ice is going away, and have started to flex their muscles to take a prime position 💪

• The Arctic is home to so many natural resources that it’s impossible to ignore, many of which are critical for advanced industries and the climate transition 🔋

• Shipping lanes are some of the biggest forces pulling countries to fight over the Arctic 🚢

• In the Arctic, the reconfiguration is already here, and it’s here to stay. If you’re looking for evidence, just look for the Polar Silk Road.

There’s a lot more to explore and much more to learn, but for now, we can take a step back and reflect on our journey.

Arctic, Reconfigured

The Arctic is emblematic of the Reconfiguration: A strong vector of climate change that leads to systemic shifts in geopolitics, trade, research and practically any other aspect of our modern, interconnected world. More importantly, it's a shift that is causing many of the participating actors to radically change their behavior and position.

The region is not the only evidence of the Reconfiguration, but it is probably the poster child of how peculiar and unfamiliar our world is becoming.

What will become of the Arctic? The future is anyone’s guess, but we did try to create a few scenarios that might help paint possible outcomes. Understanding the future of the Arctic is not only interesting, but also important:

• It gives us a window into how our world is changing and what we can do about it

• It helps us understand a dynamic we can look for in other places, outside of the region

• It delivers an organizing framework, helping us make sense of what otherwise seems like a bewildering set of random plays and events

The harsh conditions and isolation of the Arctic makes the Reconfiguration more visible and noticeable. The Arctic is one of the last frontiers left on our planet (along with the high seas), forcing actors to make decisions and chart a clear course. In a way, the Arctic is the ideal Reconfiguration sandbox.

Arctic Futures are powerful because they rest on an extreme set of starting conditions. They remind us our actions have visible consequences. It is precisely at a place where we can feel powerless that we find we have actual agency to reshape global systems.

Against this backdrop of extreme futures, it is worth concluding our journey with a question: Will we collaborate and make the Arctic a model of human triumph and prosperity, or will we use the Arctic as a theater of war? The choice is ours.

At any rate, I guess we’ll see you on the frontlines and find out!

That’s it for the Arctic Series. Thank you for reading and being partners and true Climate Globetrotters. Next up, we will travel to a different part of the world, where we will take a sip of coffee and look at how the Reconfiguration is roasting a new kind of brew 🍵

Before you leave, make sure to:

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Our journey throughout the frozen tundras of the Arctic is coming to a close.

We have spent the past few months following the misadventures of Russian soldiers, dismayed ship captains, and one ambassador-turned-king as we tried to make sense of what the heck is going in the region. Once a paragon of human collaboration and harmony, the Arctic has turned to a scene of intense geopolitical and economic competition, where everything is made up and the points don’t matter.

Or do they?

As we wrap up our investigation into the Reconfiguration of the Arctic, it would probably be a good idea to set our sights into the future.

Over the next two posts, we will explore four distinct scenarios, using Scenario Analysis Methodology, to explore the Arctic’s future and what should we do about it.

This post will present the methodology, introduce the four scenarios, and explore two of them. The other two will be discussed in the next post along with our [in the works] Arctic Simulator.

Hope you enjoy.

“Prediction is very difficult, especially if it's about the future”

The truth is: I have no idea what will happen in the future. On the other hand, neither do any of you, so I don’t feel as bad as I probably should.

At any rate, since we cannot predict the future, we’ll turn to the next best thing: Scenario Planning/Analysis, a methodology loved by analysts and consultants with usage in business, geopolitics, research and more (read about it here).

Now, I know what you’re thinking: “he’s going to bore us with lengthy descriptions of what may or may not happen”. The answer is - yes, but to help, a flurry of AI apps came to my aid.

Method to the Madness

Trying to make sense of the future of the Arctic will require us to think critically about what can actually drive change in the region and then create scenarios that will help put in a model. In other words, we need a framework.

(if you don’t care about the methodology, feel free to jump ahead!)

Setting a Horizon

For simplicity sake, we’ll set our sights to 2050. Why? It’s close enough to imagine, but far enough into the future to get you off my case if in case I’m wrong suspend disbelief. Can we set our sights to 2070? 2100? Sure. But it’s my blog, so I’ve decided 2050.

Mapping Uncertainties

The Arctic is a complex region with many moving parts and opposing dynamics. In the first step towards building scenarios that are helpful, we should recognize what key issues we’re just not sure about (in other words: uncertainties). I can think of a few big ones:

• 🌊Climate Change: How strong and fundamental will the Arctic’s climate change be? Will it be uncontrolled, rampant change or will it be more moderate and limited?

• 🌍Geopolitics: The Arctic’s geopolitics are impacted by the overall mood in global geopolitics. Will our future world be a chaotic, multipolar world of intense competition between blocs (think NATO vs. BRICS, etc.), or will global collaboration reign long-term?

• 💰Economic Development: The Arctic’s natural resources are expected to become more accessible in the future. Will we be able to resist the temptation and use resources responsibly, or will it be extraction galore?

• 🤼Public Perception: Will the Arctic be recognized as a place we should protect at all costs or will the general public stay apathetic about the region?

Defining Axes of Change

There are many, many more uncertainties. However, to move forward, we will focus just on the first two (largely independent) dimensions for our scenarios: Climate change and Geopolitics.

True, nothing is truly independent. After all, this substack is based in part on the premise that climate change influences geopolitics. Still, Arctic geopolitics are influenced by global geopolitics independent of climate change (I credit my lovely wife for reminding me of this).

At any rate, we’ll define the following axes:

• Climate Change:

  • Node I: Rampant climate change (IPCC Scenario SSP5-8.5) leads to 3.5C or higher of warming, with: ice-free summers likely by the 2030s; winter ice significantly thinner and reduced; widespread thawing of the Permafrost (up to 70%) releasing vast amounts of methane and CO₂; collapse of ice-dependent species (e.g., polar bears); increased wildfires and invasive species in tundra regions.

  • Node II: Limited climate change (IPCC Scenario SSP51-1.9) leads to 1.5C of warming: seasonal ice persists with occasional ice-free summers after 2050; thawing is limited to around 20%, with reduced methane emissions compared to higher warming scenarios; limited disruption to Arctic species

• Global Geopolitics:

  • Node I: Intense competition: global competition between blocs is kicked into high gear dramatically fracturing global governance

  • Node II: Global collaboration: world powers largly set aside their differences to solve humanity’s greatest challenges and establish extensive collaborative mechanisms to maximize global welfare (not to be confused with a utopia, where challenges are alreadly solved)

Building Scenarios

We will use our axes to build 4 stories of what can happen, each assuming a different option of the convegence of climate change and global geopolitics. Each story gives us the ability to understand what might happen.

We should note that these scenarios are not a prediction, but rather an exploration that can help us prepare for multiple futures. They are also meant to be archetypes to help make sense of developments, and middle scenarios are also possible.

I have consulted the great AI Oracle that is Perplexity and have landed on four scenarios: Arctic Wild West, Arctic Emergency Pact, Green Resource Wars and Arctic Commons.

And now our framework is complete:

All Models Are Wrong, Some Are Helpful

Now that we have explored the methodology and built four scenarios, we can start exploring each one.

Arctic Wild West:

We will start with the first scenario, where rampant climate change meets fierce global competition.

It’s 2050, and you’re standing on the deck of your shiny new icebreaker yacht. The Arctic is a free-for-all and the Arctic Council is a ghost of its 2025 self. People call you an Arctic Pirate, but you prefer to think of yourself as an entrepreneur in the new gold rush. NATO and BRICS are vying for control, often letting their guns do the talkin’, while smaller countries fight for scraps and companies compete for permits. You’re quick on your feet and have a keen sense of smell, and you have no problems with bribing the odd Norwegian partrol ship to look the other way as that shipment to your Chinese corporate clients is making its destination across the Northern Sea Route. While you count dollars, you try not to think too much about the methane plumes in the distance.

Key Operating Dynamics:

That’s a nice story. Let’s look at the key dynamics in play:

How Did We Get Here?

In this scenario, here’s how we got from 2025 to 2050, i.e. what happened that led to the Arctic Wild West:

Yeah, it’s pretty wild, I’ll admit. But definitely not out of the question!

Who Wins, Who Loses?

👍Winners include: opportunistic, small countries that can respond quickly and extract concessions from world powers (mostly as they have resources or strategic location); shipping companies and resource-extracting companies that can benefit from conflicting governance regimes and a competition for power.

👎Losers include smaller countries without resources, indigenous communities, and, well, all of us, who stand to lose from environmental degradation. Yeah, I know, “we all lose” is a general argument used loosely, but in this case it’s real and significant.

Clues From Today:

🔎 Russia’s increased militarization of the Arctic, including hundreds of military installations like radar stations, missile systems, and nuclear submarines adapted for icy conditions.

🔎 Escalating rivalries between NATO, China, and Russia over strategic shipping routes and resource control—evident in initiatives like China’s Polar Silk Road and NATO’s expanded Arctic exercises.

🔎 Arctic governance is eroding rapidly, with the Arctic Council being slowly replaced by a series of bilateral and multilateral agreements that are not really based on consensus, while some countries ignore the council altogether.

🔎 Permafrost thawing is accelerating, releasing methane plumes visible across Siberia, while ice sheets are receding faster than projected.

Arctic Emergency Pact

After seeing what happened when global competition meets rampant climate change. Now, let’s see what happens when world countries are able to rise up to the challenge.

It’s 2050, and you’re in a tense meeting aboard an international research vessel stationed in the Arctic Ocean. The ice is long gone in the summer, replaced by methane plumes rising from thawing permafrost. The Arctic Emergency Pact, signed in the late 2030s, is your life’s work—it’s a fragile agreement between the Arctic states backed by both NATO and BRICS countries designed to stabilize the Arctic, enforce sustainable shipping practices, and extract resources responsibly. No one’s happy with this agreement, which means that it is pretty good. So far, the pact is doing its job, and even allowing for Indigenous Communities to be a part. It’s hard, but it looks like it’s working.

Key Operating Dynamics:

Let’s take a look at the key dynamics of this scenario that are at play:

How Did We Get Here?

In this scenario, here’s how we got from 2025 to 2050, i.e. what happened that led to the Arctic Emergency Pact:

Who Wins, Who Loses?

👍 Winners include global powers that secure access to Arctic resources while stabilizing climate impacts (e.g., U.S., China); Indigenous communities that gain formal seats at the table and influence over governance decisions; Companies specializing in geoengineering technologies and sustainable shipping solutions.

👎 Losers include natural ecosystems that continue to degrade despite intervention efforts (yeah, they can lose); Smaller nations without strategic resources or alliances, which struggle to assert influence in this coordinated but power-driven framework; You and me, suffering from extreme weather (and pretty much everyone else, to be honest)

Clues From Today:

🔎 Increasing international focus on methane emissions from thawing permafrost as a critical climate risk.

🔎 Growing investments in geoengineering technologies like carbon capture and artificial ice platforms.

🔎 Rising calls for stronger multilateral Arctic governance frameworks amid geopolitical tensions (e.g., Arctic Council reform proposals).

🔎 Evidence of cooperation between rival powers on shared climate goals (e.g., U.S.-China agreements on emissions reductions).

Taking Stock

Okay… that was, well, something.

We have looked at two of the four scenarios for the future of the Arctic. Both scenarios imagined a world where climate change wreaked havoc on the world, sending shockwaves across globe, reconfiguring the systems that make up our lives. The only difference between the two scenarios is our ability to collaborate and come together.

Looking at today’s world, we can find evidence that supports both scenarios, from heightened Russian military presence in the Arctic (Scenario #1) to global efforts to reduce methane emissions (Scenario #2). These conflicting data points show just how tricky the Reconfiguration is. It’s easy to draw a linear, causal link from today to 2050, but a closer look shows that it’s just not that simple.

I started writing A World Reconfigured because I had a strong hunch that something’s afoot and I really wanted to figure out just what that was. I had a sense of what might transpire, but a macro-level, blanket statement that climate change is reconfiguring the world is, well, not enough. Aside from being lazy, cruising at 80,000 feet draws you towards strong causal links that miss out on the nuance and the fact that reality is a lot more messy.

If anything, my own armchair investigation into the Arctic has shown me just how unclear the future of the Arctic is (I had to crank up the AC to get a sense of what the cold might feel like… 🥶🥶🥶).

Next time, we’ll change our assumptions and explore what happens when climate change is successfully curbed and see what that does to the future of the Arctic. It’s going to be equally confusing, I promise!

Also… we’ll unveil our Arctic Future Simulator, so stay tuned!

Oh, and make sure to…

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See you next time!

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Your tenure as the Arctic Ambassador isn’t going so well. You’re tired of the Polar Silk Road, and it really feels like a wild, wild north out there. It’s as if no one cares about what’s at stake. You have good sense of what’s right, but it’s pretty clear that between one Chinese air patrol and another NATO exercise, no one’s listening to you. If it were up to you… if only you were King of the Arctic, everything would have been great, you think to yourself.

Hey… now that’s a thought!💡

We’ve been spending the past few months in the thawing Arctic, navigating between nation states as they flex their muscles💪 and scramble for shipping lanes🚢 and natural resources🥇.

At this point, you must be wondering: Can anyone really do what the F they want in the Arctic? Can I (or you for that matter) declare myself King of the Arctic (or CEO of the Arctic, if you prefer free markets over a monarchy)?👑

The short answer is not really. But if you’re a nation state, it gets complicated.

Intro to Arctic Governance

Like the permafrost that is changing underneath our feet, so are the basic (human) laws that govern the Arctic are at a crossroads. Traditionally, the Arctic was a place of collaboration, where humans banded together against mother nature’s cruel tests. Like the collaborative nature of human activity in the region, Arctic governance is based mostly on consensus and cooperation.

There are two main components in Arctic governance: The UN Convention on the Law of the Seas (UNCLOS) and the Arctic Council.

Setting the Record Straight: UNCLOS

UNCLOS is an international law convention that sets the parameters on what countries can and cannot do in both near shores and high seas. UNCLOS determines how countries can leverage natural resources. For example, it defines the Exclusive Economic Zone (EEZ), which lets a country take advantage of resources up to 200km from its shores.

While UNCLOS does not refer directly to the Arctic, it kinda sets rights of states. Since only 8 nation states share the Arctic geographically, it pretty much tells other countries to take a hike (China, I’m looking at you👀 your “Near Arctic State” isn’t fooling anyone).

UNCLOS does particularly deal with natural resources and ice (section 234), but leaves much room for interpretation, especially as climate change sinks its teeth into the Arctic. Also critical to our discussion is the ability to lay claims to extend the EE beyond the 200km line.

Governing the Region: The Arctic Council

The Arctic Council, established in 1996 through the Ottawa Declaration, was designed to create a framework for collaboration and joint management of the region. The Arctic Council is made of:

The Arctic Council is ruled by consensus, which means that Arctic states have to agree about pretty much anything unanimously before anything gets done. But as we'll see, this collaborative spirit is melting faster than the ice, leaving room for self-proclaimed Arctic royalty (me, that is).

You can already see where this is going…

Arctic Influencers and Northern Nobles

It’s been a few months, and you’ve been hard at work. Setting up your new kingdom isn’t easy: You raised startup capital, you fixed yourself a new castle inside a dilapidated deep sea port, and you’ve had to sign so many forms you almost wish you hadn’t. But it’s all worth it: Dominion of the Arctic is now it’s own Arctic State, with a seat at the Council and everything. You even have a flag. You couldn’t be happier!

The Arctic is formally governed by consensus. Anyone who spent a minute reading about the Arctic in the past few years can see the problem: Most movers and shakers in the region don’t give a damn.

Who’s Doing What

Over the past few years, as different actors (states, companies) are trying to flex their muscles and create a posture within the region, there is an increasing encroachment on Arctic governance.

As traditional governance structures crumble, various actors are carving out their own Arctic fiefdoms. Let’s see who’s doing what:

States:

• US:

  • Conducts FONOPs in Canada’s Northwest Passage, challenging its sovereignty.

  • Strengthens NATO ties and reactivates Arctic military bases.

  • Expands seabed mapping to claim Arctic resources.

  • Really wants Greenland.

• China:

  • Promotes the Polar Silk Road through investments in Arctic infrastructure.

  • Uses icebreakers for dual-purpose scientific and strategic missions.

  • Self proclaims itself as a Near Arctic State.

Sheesh, with such creative interpretations, who's to say you can't crown yourself Arctic monarch?

• Canada:

  • Enforces sovereignty over the Northwest Passage with legal and military actions.

  • Partners with Indigenous groups for Arctic monitoring programs.

  • Finalizes boundary agreements but resists non-Arctic interference.

• India (yeah, India!):

  • Creates an Arctic Strategy (even though they are really far away…)

  • Expands its presence through Arctic Council observer status.

• Russia: LOL c’mon, you know Russia keeps on doing whatever it wants in the region (one example is here).

Non-State Actors:

• Shipping Majors and non-Profits form the Clean Arctic Alliance to create new frameworks for sustainable shipping practices

• Rosneft sets private standards for resource extraction in the Arctic.

This growing list of activities is done… you guessed it - without consensus or asking anyone.

Why? Because they can.

A Growing Rift in the Arctic-Space Continuum

These activities show a growing rift between the official, consensus-driven governance structure of the Arctic and how things take place in practice. Clearly, more and more nations recognize the importance of the Arctic to their interests and are making moves to either assert their dominance or call for a say in the region (hey India i’m looking at you!).

🤠 Hold on to your cowboy hats: the Arctic isn’t lawless. But, in recent years, instead of using the Arctic Council, both countries and private actors resort to alternative arrangements that bypass the consensual mechanics of the Council.

Basically, this is what’s happening:

Yes, it’s more complicated, but you get the point.

Nature abhors a vacuum, the old saying goes, and this case is no different. It looks like that in the Arctic, that vacuum is being filled by a motley crew of self-appointed Arctic influencers and would-be northern nobles (I’m definitely on my way to a fitting of my icy crown)🫅

The growing interest in the Arctic and the growing appetite of nations and corporations to flex their muscles in the region creates a plethora of frameworks and agreements that create different “mini regimes”.

The Many Faces of Arctic Governance

Yeah, there are plenty of agreements out there that bypass the Arctic Council: the 2011 Arctic Search and Rescue Agreement (Nuuk, Greenland); the 2013 Agreement on Cooperation on Marine Oil Pollution Preparedness and Response (Kiruna, Sweden); the 2017 Agreement on Enhancing International Arctic Scientific Cooperation (Fairbanks, Alaska); the 2018 Central Arctic Ocean Fisheries Agreement (Ilulissat, Greenland), and many more.

Discombobulated? So am I.

So I decided to segment this hodge-podge of Arctic agreements into four pillars. In order for this not to get boring, I created an AI-generated infographic for you:

This hodge-podge of mini-regimes signify an era of fragmentation in Arctic governance. The big question on the table is: what does the future hold for the Arctic Council at an era of intense geopolitical and economic competition? Can the world come together and collaborate as it used to?

To be fair, as the Arctic becomes more accessible, I can kind-of see the point of non-Arctic states. The growing importance of the Arctic isn’t recognized fully by the current structure of the Arctic Council, which gives Arctic States almost full control over the region and its future. Countries like India, China and others are right to wonder: hey, why can’t we get a piece of the action?

I’m not a fortune-teller, but it seems to me that the hotter the competition over Arctic opportunities are, the less countries will be willing to collaborate, rendering the Council less effective and relevant. This will open it to being significantly challenged by the growing appetite of various actors to flex and stake a claim in the region.

Who knows, we might even see an Arctic kingdom or two (one of them is mine) 🤷🫅

Ok Who Cares?

It’s been a while, and you finally understand the phrase “heavy the head that wears the crown” (literally, yours is made of solid gold…). You thought your Arctic fiefdom will help you put everyone in line. Instead, you spend your days signing fishing licenses and battling your cousin, who thought he can build his own little kingdom under your nose. And at the end of the day, the Arctic isn’t better off. People listen to you now, sure, but you now have investors (who want 💰💰💰), subjects (who want 🍞🍓🍅) and enemies (who want… you know). Suddenly being an ambassador sounds a little… easier.

It’s easy to discount the growing rift between official Arctic governance and how things unfold in practice as bureaucratic nonsense (especially in the days of DOGE). I get it, it sounds a bit pointless to deal with councils and working groups when the world is on fire.

But… (there’s always a but)

👉 The Stakes Are High: The Arctic’s role in the future of the planet and human societies that live on it (economically, geoplitically, environmentally) is too important to be left to bottom-up developments. Governing the Arctic in a way that benefits humanity is important.

👉 The Price Will Be Paid in Installments: Actions have consequences, and the price will be paid by the rest of us in installments, as different regimes and agreements will conflict with one another and will send ripple effects on trade, international tensions, the environment, and even our purse strings.🪙

👉 Power Vacuum Paradise: As governance structures weaken, the Arctic becomes a playground for those bold (or foolish) enough to stake their claim. Today's Arctic explorer could be tomorrow's Polar Prince.

👉 This is a Recipe for Disaster: Sure, let’s leave a place that is both unforgiving and incredible fragile up for grabs. What could possibly go wrong?

It turns out anyone can really do what the F they want. The problem is that there are going to be consequences for the rest of us.

What should/can we do about it?

Personally, I’ve already commissioned an architect for my Arctic Castle.

The obvious answer would be to strengthen the Council, but I’m not sure that going back to the consensus-based model is the right approach. On the other hand, the regulatory fiefdompalooza isn’t going to get us far either. Instead, the answer might lie in structural changes in the Arctic Council to allow for more competition, but also make sure it doesn’t go crazy. That’s what we should do about it.

Still, as I’m writing these lines, I remain not very hopeful about our ability to fight the very human tendencies to compete for resources and power. In other words, there may not be anything we can do about it.

Can we avoid turning the Arctic into a lawless frontier and in the process do more harm than good? I sure hope so.

Seriously Can I Be King Here?

Ok, since I can’t be king, we’re off to our next stop… the future of the Arctic!

You’ve waited for this your whole life. As a career diplomat, you’re about to get reassigned, and you’re ready to be posted to one of the luxurious capitals of Europe. Paris sounds nice this time of year, and you can’t go wrong with a stint in London. Ahhh, the prospects of fancy dinner parties and swanky hotels do sound appealing after 30 years in some of the world’s most God forsaken places. The Great Rest is on…!

But not so fast. Your new posting arrived. Congrats - you’re the new ambassador to the Arctic!⛄❄️🥶🧊

Time to pack your bags and board a flight ✈️

At this point, I hope that I’ve managed to convince you that there’s something important happening in the Arctic, and we should be paying attention to it. We explored the shifting geopolitical tides, natural resources, and the opening of new shipping lanes. The Arctic is a place where many interests and aspects come together. Perhaps the most notable case of this convergence can be found on the Polar Silk Road.

A New Silk Road?

The original Silk Road was (still is?) a Eurasian network of trading routes used to pass goods from east to west and served as the arteries of the global economy. While the origins, nature, and importance of the Silk Road are a thing of historical investigation, it is without doubt that the term is widely used to evoke notions of trade and economic relations*. It is no surprise then that China has decided to name its ambitious project to connect Europe and Asia - the Polar Silk Road.

Announced in 2018, The Polar Silk Road (the “PSR”) is an ambitious expansion of the Belt and Road Initiative, designed to connect Europe and Asia in a way that will facilitate trade and position China as a meaningful player in the Arctic. Unlike the original Silk Road, the PSR is a waterway; the Northern Sea Route, to be specific (hey, recall the deep dive we did on the topic?!).

*For those interested in reading more, I highly recommend Peter Frankopan’s “Silk Roads”!)

How Do You Build a Silk Road at Sea?

Great question.

If we were on land and wanted to build a new silk road, we probably would have either paved asphalt🛣️ or built railways🚈. Take your pick. But since we cannot do that at sea, the meaning of building the PSR is mostly concerned with the supporting infrastructure:

• Ports and Facilitites: Deep sea ports and logistical hubs to allow ships to dock

• Energy Infrastructure: Infrastructure to take advantage of resources in the area

• Transportation: Railways and roads to connect docks and other infrastructure and to allow easy and quick access to logistical hubs

It’s not so much a matter of building the PSR as it is establishing it. This requires a more nuanced and complex set of actions and conditions to change the flow of goods and services in a volume large enough to shift global trade dynamics; akin to how the establishment of sea trading routes from the Americas to Europe in the 1500s changed the global commercial landscape. To be successful, China would need to navigate complex (and frozen) waters and overcome many obstacles. The question is… why bother?

Venturing into the PSR

“Nothing works around here” you mumble to yourself, trying to get the heater to work at some defunct, remote base. Your renovated home base should be ready at some point, but until then you’re out of luck and stuck here. What’s an Arctic Ambassador anyway, you wonder. It’s practically a series of icebergs.

One day, as you’re trying to fix the radiator once again, you hear one of your military colleagues use the term “Polar Silk Road”. Your eyes light up - finally, a chance for some high class travel, maybe an Italian roast espresso or a decent internet connection. “When are we hoppin’ aboard?” you ask with enthusiasm. “Not so fast”, your colleague says. You’re disappointed after hearing that it doesn’t really exist, and there’s no Italian roast at the Yamal LNG depot, but something becomes apparent: your ambassdorship is going to get a lot hotter than you thought…

The PSR, as mentioned above, is a project where shipping, natural resources, geopolitics, the environment and even Science(!) converge. The prospects of changing the global balance of power through trade and geo-flexing shows why the PSR is important to China. To be clear, it’s not that the PSR is China’s top priority at the moment, but there is evidence that China sees the PSR as a vital asset to be cultivated as a long-term strategy.

Shipping, Once Again

At its core, the PSR is a maritime trading route that requires infrastructure to be built and developed, including a capable fleet (Polar-Class ships, anyone?). To this end, China is already working on developing its polar fleet.

With the increasing rate of ice🧊 melt in the Arctic, it is only a matter of time until the Northern Sea Route (NSR) becomes ready for broader use. The NSR is an Arctic shipping route that has potential to reduce the travel time from Europe to Asia and is controlled by Russia. To unlock its potential, infrastructure would need to be built, an investment unlikely to be carried solely by Russia (at least within the NSR). Enter China..

China is planning, through its partnership with Russia and other countries, to build extensive infrastructure and develop this route, “paving” the way for China to increase its influence in the Arctic region.

So… shipping lanes and sea routes? Check✅

Economic Development & Natural Resources

The PSR is not only about opening of shipping lanes. The PSR includes, in theory at least, economic development projects. Making the Polar Silk Road economically worthwhile is not just about making shipping happen, but also requires investing in natural resource extraction.

Currently, the most meaningful of the PSR economic development projects is the investment in the Yamal LNG Depot, a large project designed to generate up to 5.5 million tonnes a year of liquified natural gas. Developing the Yamal LNG Depot includes building train infrastructure, an international airport, a sea port, LNG tankers (and more!) that can withstand the harsh working conditions (yeah, it’s even colder than you’d expect, with temperatures dropping to a bone-chilling -57C and entire months passing under the cover of darkness). This is no easy prospect, with numerous contractors and oodles of cash required to finance the project💰💰💰

Due to Western sanctions on Russia, the project had been quite stuck in limbo over the past few years, until recently, when the project managed to secure a $12B loan from Chinese lenders.

Of course, other than the Yamal project, there are a host of other projects that are underway: Arctic LNG2, Payakha Oilfield, Zarubino Port, Arkhangelsk Deep Water Port, and others. How’s it going with those projects? Not great, thanks for asking. But that’s for another time…

At any rate… natural resources? Check✅

Geopolitics

If I told you that geopolitics are involved with the PSR, would you be surprised? I hope that by now the answer is no.

China is not an Arctic state, but rather a self-proclaimed “near-Arctic State” (with the Arctic being at least 900 miles away… kinda near, I guess…). China is an observer on the Arctic Council and cannot operate in the Arctic as it sees fit (with some exceptions), making it dependent on Russia as a partner to promote the PSR.

Putting aside the PSR’s prospects of success, this partnership keeps the US and other Arctic countries up at night and leads to increased tension in the region. This partnership includes not only economic developments, but also “bang-bang pow-pow”🪖🔫 military collaborations between China and Russia, including Russian and Chinese bomber plane drills off the coast of Alaska and mutual sailing exercises. Never gets boring over there…

As the PSR continues to develop, China is tightening its grip on the Arctic. It is likely that we will see increased military collaborations in the region to bolster China’s positioning in an attemp to show other countries who’s boss.

Geopolitcal muscle-flexing?💪 Check✅

Bonus Point: Scientific Research

Yeah, a bunch of scientists drilling in the Arctic is not the first thing you think about when discussing the PSR and China’s ambitions, but scientific research is one of the earliest and most common forms of Arctic collaboration.

Russia’s invasion of the Ukraine has upended and disrupted collaboration, but that still does not change China’s usage of scientific research to enhance its position in the region. Being an observer on the Arctic Council, scientific research is one of the few activities China can pursue on its own.

So… scientific research? Hell Yes! ✅

Mmmm’Kay, who cares?

Fast-forward a few years, you’re still stuck in that same base, and you haven’t had Italian roast in a while. But you don’t care. You have bigger fish to fry, and are knee-deep in icy froth. Your country sent you to create alliances and collaborations, to court developers, and create an alternative to the Polar Silk Road.

It’s not easy. You’re late into the game, but it’s why you joined the service. You’re fully on board the new Arctic frontier, where a new Great Game is being played, and for once, you feel like a player. The Great Rest will have to wait.

Now, if you could only get that heater to work…

It’s too early to tell whether the PSR will be a success and position China as a force to be reckoned with in the Arctic or not. Be the fate of the PSR be as it may, its mere existence shows just how important the Arctic is to countries outside of the Arctic Council. The PSR, as we mentioned above, encapsulates the complexity of the Arctic region and captures the Arctic zeitgeist.

To me, the PSR encapsulates something bigger than the sum of its economic, geopolitical, scientific, and maritime parts; it shows the Reconfiguration at work in all of its glory.

Still, the operating question is “who cares?” I think it should be all of us:

👉 At the macro level, we are likely to see more and more instances of large-scale projects, akin to the PSR, led by ambitious parties seeking to take advantage of the prospects of a thawing Arctic. This competition could accelerate the destabilization of the region - both militarily and environmentally.

👉 What if China succeeds in operating the PSR? Hindsight is 2020, but history is full of examples of how the rewriting of trade routes change the global balance of power. Think Portugal and Spain of the 16th Century. Will we see the Arctic helping propel China to the status of the dominant super power? At the very least it will weaken US hegemony over the region and provide another point of strength to the BRICS side of the equation.

👉 Business opportunities. If you’re in the shipping industry, in construction, or in energy, you should pay attention. It’s only a matter of time until NATO countries figure out they should engage in projects on a similar scale and vision.

👉 Speaking on vision, what’s the NATO vision for the Arctic? Clearly Russia and China have one. The PSR is a great window into what role the Arctic plays in their vision of the region and the world. Should NATO think in similar fashion?

👉 Climate-wise, the PSR means accelerated regional development that could further destabilize the local ecosystems and continue to accelerate Arctic thawing ad-infinitum. What price are we willing to pay for economic development?

Whatever angle you choose to focus on, the PSR gives us a glimpse into what the future may hold. There’s no telling what will happen specifically (the PSR might be abandoned, it may fail, it may be a stellar success for China). However, the type and scale of the project shows just how climate change is reconfiguring the way nations and companies are competing for hegemony in the region, with ever growing ambitions. It’s likely that we will see other development projects and more attempts to take advantage of what the Arctic has to offer.

On the other hand, as was the case with natural resources, these ambitions will come at a costly price, at a time that humanity cannot afford to continue to destabilize our planet and its local ecosystems. Can we resist? I’m not sure.

Next up, we’ll recap this series and try to think about Arctic governance and the future of the region. Arrivederci👋

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This is Pt. 3 of “It’s Getting Hotter in the Arctic” series. For the first part of the series, click here, and for the second part click here. Ice guaranteed! 🧊

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“Man, life at sea was tough, but this isn’t much better” you think to yourself as the drill is trying to break through thousands years of ice🧊, getting stuck every couple of minutes. Not too long ago, you were the captain of a Polar-Class 1 ship, the “Jeez It’s Cold” (she was a beaut!), but life at sea babysitting cargo ships was just not what you wanted…

You heard a couple of sailors talk about some weird metals they found along the Bearing Sea, and thought to yourself “hey, I like money💰, let’s give it a go.” So on to the Permafrost you went, thinking it’s the Gold Rush all over again.

I hate to admit it, but Donald Trump has a point.🍊

It’s been a few weeks since the 47th President of the United States threatened to invade Greenland, and many are left to wonder: Really, Greenland?

Yes. Greenland (which, contrary to what the name suggests, isn’t green at all)

Now, I’m not in favor of the US invading Greenland. I’m not in favor of anyone invading anyone for that matter. But there’s a method to the madness, a madness that will be the focus of this deep-dive.

It’s hard to say exactly why President Trump set his sights on Greenland, but one can easily guess it has something to do with the fact that Greenland has much more than just ice🧊.

The story of Greenland is complex and holds many elements to it, but it is a good segway into today’s topic: Natural resources.

We started our voyage into the Arctic tundra by focusing on geopolitics and exploring how the Arctic is starting to play an bigger role in countries’ national security doctrines than it used to. We also explored shipping lanes as one of the reasons for that uptick. Now, it’s time to set our sights onto another aspect of the Reconfiguration: plain ole competition for resources.

The Arctic is not only a better gateway between continents (at least, when it’s ice-free), but it is also a wild land (and sea) rich in natural resources and hidden treasures that have been frozen from time immemorial. And now, with climate change altering the Arctic, nation states and companies are making plans to take advantage of what’s hidden beneath the permafrost.

That is why we will now pack up our drills and go to the remote permafrost of the Arctic!⚓

The Permafrost and Natural Resources

The permafrost is the large layer of rock and sediment frozen for long periods of time that covers about 24% of the soil in the Northern Hemisphere, ranging from Siberia to Alaska (but the long way around). The permafrost ranges from 1 meter thick to 1,500 meters and exists in more than one form. Climate change is creating meaningful changes to the permafrost, causing accelerated thawing and an increase in the active layer, the layer that thaws and refreezes annually.

Climate Change Accelerates Permathaw

The acclerated rate of thaw in the permafrost is directly caused by climate change and the rise of temperatures:

• Permafrost temperatures have risen between 1.5 to 2.5°C in the last 30 years

• 25% of permafrost surface is expected to be lost, if the current pace of climate change stays the same (and we all know it’s getting worse…)

• Even if emissions are curbed, 40% of permafrost surface is expected to be lost by 2100

The accelerated pace of permathaw is generally bad news for everyone, with risks ranging from destabilizing existing infrastructure to turning the permafrost from a carbon sink to a “carbon holy crap”. The destabilization of the permafrost harbors many risks and generally raises concerns and alarms, and we may explore them at length in later parts of this series, but for now we will set our sights to natural resources.

Natural Resources in the Permafrost

Underneath all the ice🧊, by the virtue of many natural processes, many types of materials got stuck and became frozen in time.

The permafrost includes:

• Oil & gas: About 90 billion barrels of oil and 44 billion barrels of liquid natural gas (yeah, that’s a lot!)

• Minerals:

  • Rare earth minerals (lots of stuff you’ve probably never heard of, but that are important for a range of applications)

  • Metals (lead, iron, nickel, zinc, gold, silver, etc.)

• Lots of mercury

• Timber (though not frozen)

• Wildlife

Natural resources, as we can see, can be found in abundance across the Arctic region, from Siberia to Greenland to Canada. Natural resources in abundance are worth… well, lots of money.

The Race Is On

It’s not working so great for you, you figure the fifth time that drill gave up on you. Your friends aren’t doing so hot either. Who knew life on the Permafrost looking for gold🪙 was so hard. Except, literally anyone but you. If you only bothered to ask (or do a little bit of reading), they would have told you that Arctic drilling of any kind is not easy.

You’re kind-of miserable here. There’s no sun for a big portion of the year, and it never gets warm enough to… actually it just never gets warm enough. Being an Arctic sea captain doesn’t look that bad now…

The accelerated pace of the permathaw is changing something fundamental in the economic opportunity that exists within the permafrost. Until now, much of the Arctic drilling and the efforts to extract resources was expensive, limited in duration, and just generally hard to do. It’s not that until recently no extraction was done, far from it, but extracting resources from the Arctic was remarkably costly and limited. To give you an idea of why, consider the cold: There is only a limited window of time that is available to conduct different operations before it’s too cold to drill and extract. We’re not talking “take a coat lest you catch something”☃️ cold, we’re talking “equipment failure” cold❄️.

If that’s not enough, the remoteness of the Arctic requires infrastructure, including ports, railways, housing, electricity, and other basic conditions to sustain operations. The harsh conditions make building and maintaining infrastructure pretty tough. Think about the last time your flight got delayed due to ice conditions, and multiply that by a gazillion (yes, that’s the exact figure!).

These, and more, are making the costs of resource extraction projects to be waaaay more expensive than their equivalents in warmer climates (sometimes, even 50-100% more expensive).

But now, with climate change and the accelerated permathaw, it’s starting to change.

Changing Fortunes on the Permafrost

The changing climate and the acclerated pace of thawing reduces some of the challenges and costs to extracting resources:

• Reduced ice-cover and warmer temperatures mean that there are longer windows of time for getting work done in the Arctic, with equipment less likely to fail

• Construction of new infrastructure can be easier. Even though, the jury is out on this one, as thawing permafrost is generally bad for existing infrastructure

• Reduced coverage means that some of the resources that were heretofore inaccessible (as they were, well, frozen) are easier to access and require less effort to extract

Indeed, there is a visible upward trend in just how much exploration for resources in the Arctic there is. There are many players that are seeking to take advantage of the permathaw. Let’s take a look at what some of them are doing:

• Norway:

  • Gearing towards opening up its seabed to mining exploration, approving a large plan in 2024, and granting new licenses for oil & gas exploration in the Barents Sea

  • Equinor, Formerly known as Statoil, is a Norwegian company that has been a pioneer in Arctic oil exploration. Their Snøhvit field in the Barents Sea was the first offshore development in the Arctic, demonstrating the potential for responsible resource extraction in this sensitive region.

• Russia:

  • Commenced operation of the LNG2 project, though with limited success due to sanctions

  • Gazprom, the Russian energy giant, has been actively developing the Yamal LNG project, one of the world's largest and most complex LNG projects. Despite challenges posed by the harsh Arctic environment, Gazprom has managed to extract and export significant amounts of natural gas.

The race for Arctic resources isn't just about economic gain; it's reshaping global politics. As nations vie for control over these newly accessible treasures, we're seeing a new form of 'Cold War' emerge – one that's ironically getting hotter by the year

It’s important to note that it’s not all sunshine and roses for natural resource hunters and gatherers in the Arctic (though, less ice means more sunshine…). Not everyone is convinced that Arctic oil drilling is worth it. For example, oil major ExxonMobil has recently expressed disinterest in drilling in the Arctic for lack of economic viability. Arctic resource exploration and extraction is difficult and complex, and there is no simple, unidirectional reality. It is likely that as we progress, we will see a mixed bag of activities.

Back to Greenland

I know, I know. You want to know how Greenland fits into all of this. After all, opening with Greenland and not discussing it later in the text is just bad writing.🤷‍♀️✒️

So, the deal with Greenland is pretty simple. Remember all the resources we outlined above?☝️ Greenland has all of it, in spades. I mean, a lot of spades. A factory of spades.

• Out of the 90 billion barrels of Oil & Gas, Greenland is home to about a third of those barrels.

• 25 out of 34 minerals considered by the EU to be critical raw materials can be found in vast amounts in Greenland, including Rare Earth Minerals (REEs), graphite and others

• Fisheries are also an important resource available in Greenland, that is likely to become ever more important with the growing impacts of climate change.

• About 20% of the world’s freshwater is tucked in Greenland’s ice🧊 sheet.

Now that we know what’s inside the icebox that is Greenland, Trump's interest in it suddenly makes some more sense. Buying Greeland would have given the U.S. strategic control over a significant portion of Arctic resources, potentially shifting global power dynamics. I mean, if it was for sale, anyway (there are plenty of other ways to get the strategic benefit without buying Greenland, but hey, it’s not like I’m in the business of giving advice to world leaders. I wish I was, but that’s between me and my therapist)

Oh, the Irony

You’ve been drilling for months. It’s cold. You miss your ship. You haven’t seen your wife/husband/take your pick for months on end, and all you have is that damn drill that isn’t working!!! And to make matters worse, the Ice🧊 you stand on keeps on moving. You bumped your head a couple of times.

Just as you're contemplating a career change to tropical beach bartending, your drill hits something that's definitely not ice. Suddenly, you're staring at a vein of minerals so rare, they make diamonds look like pennies. You couldn't pronounce their names if your life depended on it, but the company suits that hired you are practically salivating through the satellite phone. The bleak Arctic wasteland transforms before your eyes into a glittering treasure trove. As you survey the frozen landscape with newfound appreciation, you can't help but think, "Maybe there's more where that came from." For the first time in months, the biting cold feels less like punishment and more like the price of admission to the world's most exclusive mineral club.

Going Green

While we tend to think of oil & gas when we think of Arctic natural resources, a critical piece of the story lies in rare earth minerals, and their importance in the transition to low/no carbon economy. The short of it is:

• Many of the available natural resources, including lithium, zinc, copper and others, are vital components in the renewable energy supply chain, used in anything from windmills to electric vehicles to solar panels

• Rare earth elements that are used in renewable energy are available in the Arctic in sufficient amounts to rapidly accelerate the transition to a low carbon economy, and demand is expected to grow significantly in coming decades

• The Arctic holds the largest deposits of gold, zinc, nickel, cobalt, palladium, and iron, materials used for many industrial uses, and particularly for renewable energy

See the irony? No? Let me try…

The growing availability of resources in the Arctic, caused by climate change, gives us the resources we need to… mitigate climate change.

We seek to prevent climate change by transitioning to renewable energy and wean off fossil fuels, but there is a cost. The resources needed come at a heavy environmental and climactic toll:

• Ecosystem degradation and habitat destruction

• Jeopardizing biodiversity

• Soil contamination

• Carbon and methane release

To be clear, I am not saying we should avoid mining at all costs. The risk of not transitioning can be greater than the risk to local ecosystems due to mining. But the irony here is, as the young fry say, 💯.

Ok, who cares?

As always, we try to end with the question: why should you care? After all, you are not an Arctic explorer (at least, I hope not), and let’s face it, unless you are building wind turbines in your backyard, it’s not easy to see how this is important to our daily lives.

Except that it is.

The natural resources that are hidden in the Arctic have the potential to improve our lives and even make many things cheaper for some of us. They can impact our geopolitics and change balance of powers. For centuries, they were, at best, opportunities closed behid frozen doors. Now, with the climate changing at neck breaking speeds, they become accessible and suddenly beckon upon us, and it’s not entirely clear that we can resist their call. The only question is: What will it cost us?

The vast riches of the Arctic region, and their specific use for clean, renewable energy, show just how complex the world we live in is, and how difficult the choices we have to make are: extract resources to power the green energy revolution, stick to fossil fuels or tone down modern life (not many are excited about this option, I think).

Are there other choices? Probably. But it’s not for certain that they are any better.

Other than telling us a tale as old as time about human nature and the quest for resources and the hunger for exploration, the race for Arctic’s natural resources shows just how quickly the global systems that make up our lives adapt to make the most of impacts of climate change. Slowly, then very quickly, global markets will inject natural resources frozen in time into our global beltways and into our homes in the form of the energy we use and the products we buy.

In a way, the story of the Arctic’s natural resources is the story of the Reconfiguration. We should all care because we all stand to benefit and lose from every choice - as individuals, as societies, as humanity. In a way, that’s the story of the Arctic.

And so, we come full circle to Donald Trump's seemingly outlandish proposal to buy Greenland. While his approach may have been characteristically blunt, it inadvertently highlighted the growing importance of Arctic resources in global affairs. As we navigate this new frontier, balancing economic opportunities with environmental stewardship, we're all becoming Arctic explorers in a sense. The decisions we make today about these frozen treasures will shape not just the future of the Arctic, but the future of our planet. So the next time you hear about melting ice caps or rare earth minerals, remember: what happens in the Arctic doesn't stay in the Arctic. It affects us all, from the halls of power to our own backyards.

If you liked this deep-dive, make sure to share this with your friends, so they can try to buy Greenland as well:

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Congrats! You just got your own command, as the Captain of the “Jeez It’s Cold” Polar-Class 1 Ship, the world’s largest and most fearsome Icebreaker, armed with all of the latest equipment and weaponry. You are sooo excited to traverse the icy waters of the Arctic, defending your country’s global interests and taking part in the great battle for the soul of the Arctic. Hurray! 🔱⚓

In your inbox awaits your mission details. It is… (take a deep breath) babysitting?! You are asked to clear the path for some commercial ships along the Northern Sea Route, so they can bring some goodies to people who paid top dollar💵 for expedited shipping. They can’t wait, so you have to hurry up, put on your captain’s hat and set sail!

The happenings in the Arctic that we discussed in the previous post are a part of a greater trend of shifting sands taking place all over the world, shifting sands that I’ve dubbed as the Reconfiguration.

While naming something is helpful, it’s not enough. It is not enough that we point our finger at the Arctic and say “huh!”. It’s like, in the words of one of my friends, saying there’s a thing called “Gravity”. To understand the Reconfiguration in the Arctic, we need to look deeper and explore the contours and the ripple effects of what’s happening in there.

The changing landscape in the Arctic is causing multiple ripple effects. Today, we will focus on one of the more important ones: Shipping 🚢🚢🚢

In a way, shipping routes are perhaps one of the key reasons the prospects of Climate Change in the Arctic are so tempting for world powers. Climate Change ravages many parts of our world, but it is only when climate change alters dynamics of power, money and control that different stakeholders (countries, corporations, activists, etc.) wake up from their slumber.

To be clear, I think that the changes in the Arctic are devastating and should be avoided at all cost. In no way I think the Reconfiguration is welcome or desirable. On the contrary. The loss of Ice in the Arctic is a climate catastrophe waiting to happen, but it doesn’t free us from understanding what will happen next.

So without further ado, let’s look at shipping, shipping lanes, and the quest for the heart of every day shoppers. Yeah, [insert your name here], I’m looking at you.

Shipping, Ahoy!

Thawing Ice, Clearing Routes

The thawing of the ice🧊 in the Arctic puts us on track for iceless Arctic summers as soon as the next decade (although no one is exactly sure when). While it doesn’t mean that the ice will be completely gone, it does mean that over summer months there will be little to no ice, ultimately enabling shipping vessels to travel through what was, for many a millennia, an impassable route.

Thawing ice🧊 means that in the coming decades, perhaps a first since the beginning of modern shipping, new shipping routes will be opened for portions of the year, altering some of the basic economics of global shipping. Global shipping hubs that were considered the preferred routes linking oceans and continents, such as the Suez Canal and the Panama Canal, are at risk of losing their status, and the revenues they bequeath to their owners.

Thus, the changing climate in the Arctic is sending shockwaves across the world, creating economic opportunities for some and losses for others. Ice🧊 free summers in the Arctic can have a meaningful impact on the price of maritime trade and the price of shipped goods, but can also, as we’ve covered at length in the previous post, create turmoil and even military clashes over territorial disputes and efforts to control the global economy.

Need for (nautical) speed

Oh great. Another babysitting mission. The “Jeez It’s Cold” is ready to set sail, but you’re not feeling it. Why do they need you anyway with all the ice gone? They can do it themselves, you grunt. Maybe it’s time to think of another job? You always wanted to be the Love Boat Captain, maybe it’s time to go for it?

Maritime shipping is a complex topic that resists simplification, and we cannot do justice to the nuances of international maritime trade (although UNCTAD offers great resources). For our purposes, it suffices to say that from a shipping perspective, shorter is (almost always) faster, better and cheaper. The thawing ice🧊 creates shorter routes than those existing today, upending dominance of current shipping hubs. Let’s take a look🔎 at the main ones that are opening🚪

Northern Sea Route

The Northern Sea Route (NSR) is a route that stretches from Murmansk to the Bering Strait, connecting Europe and Asia along 5,600 kilometers of rough, icy🧊 waters. If you’re not sure exactly where the NSR is, think of Russia. Found it? Great.

The NSR sits within Russia’s Exclusive Economic Zone, with the country claiming it holds control over the route, a claim rejected by the US and unclear according to international law (see great analysis by War on the Rocks).

It is estimated that the NSR saves roughly 40-50% of voyage time compared to the existing route through the Suez Canal, with a journey from Rotterdam to Yokohama reduced by 14 days in total. Some researchers predict that operationalizing the NSR will result in diminished trade volume running through the Suez Canal.

Russia’s (potential) ability to exact a financial toll from the NSR along with the projected rerouting of traffic from the Suez Canal helps understand the growing tension in the Arctic we have explored in the previous post, and gives an inkling of what may come next.

Northwest Passage

If the NSR posed a threat to the dominance of the Suez Canal, the Northwest Passage (NWP), connecting the Atlantic and Pacific oceans, is in direct competition to the Panama Canal, one of the world’s most important maritime arteries (with roughly 5% of global shipping traffic)

The NWP is claimed by Canada to be its own (not without reason) as the passage stretches from Baffin Bay in the East to the Canadian Arctic Archipelago in the North and the Bering Strait in the West. As you may expect, this claim is widely rejected by other nations, fearing Canada will take advantage of ownership of the passage (Canada? Seriously? It’s really the least bad option here… but hey…)

The NWP is a case in point of just how tricky Reconfiguration dynamics are. On the one hand, the opening of the NWP (which has been officially open to ships without icebreakers since 2007) poses a threat to the Panama Canal and may lead to decreased revenues in Panama and shifting geopolitics in the region. But, at the same time, due to effects of climate change on the canal (most notably, from growing drought conditions), there are increased disruptions to trade, and the opening Arctic routes may reduce the reliance on the canal, allow for alternative routes and save billions of dollars💵 annually to national economies, from the US to China to Europe.

Transpolar Sea Route

Wait, wait, wait. There’s another one? Two Arctic pathways aren’t enough?

Unlike the previous two routes, the Transpolar Sea Route (TSR) passes through the high seas and is not within the EEZ of any nation. It is also very, very frozen. 🥶🥶🥶

The TSR crosses through the North Pole and spans 3,900 kilometers, making it the shortest Arctic route, saving brave polar captains two days of travel compared to the NSR.

Hold your Icebreakers

“Are they really serious with this Arctic shipping thing?” you think to yourself. There’s literally nothing here for miles on end. Just Ice🧊, and even that’s going away. What if something happens mid-way? Sure, we’ve got everything we need on the “Jeez It’s Cold”, but most of these commercial ships aren’t going to do well on their own. “Hmm…”, a lightbulb💡moment occurs, and you realize that maybe there’s some money to be made with some infrastructure build in the area. Even megacities started as a pack of tents, you think to yourself. Maybe, just maybe, being a developer will suit you better than babysitting stuffed animals packed in shipping containers.

Before we set sail for the Arctic or contemplate which of the new routes we can take on our voyage, we have to take a deep breath. Yes, there is overwhelming evidence that the changes in the Arctic climate will eventually lead to the opening of the three Arctic routes (once again, at a grave cost). However, it’s not as simple as waiting for the ice🧊 to thaw and turning the engine on. Making use of the Arctic routes will be challenging, for a number of reasons:

• 🏭Infrastructure: Yes, it’s that boring thing you never really think of but panic about when it’s not working (check out John Oliver’s brilliant segment on just how boring but important infra is). To make use of the Arctic routes, we need infrastructure, such as Deep Water Ports, Search and Rescue capabilities, and even access roads to ports. In some parts of the Arctic coastline there’s literally nothing. The NWP is particularly thin on infrastructure required to make it commercially viable, and Canada will need to invest heavily in order to commercialize it.

• 🚂Reliability: To be useful for international shipping and to be used as a true alternative to the Suez and Panama canals, the Arctic shipping routes need to be reliable and consistently open, and to commercial ships. Currently, that is far from being true. There is still much uncertainty as to the extent and speed of the thawing, and it is not quite clear as to how consistent the thawing will be within each route. For example, out of the three, the NWP is considered the least viable for commercial shipping, while the NSR is considered to be the most reliable for purpose. This is a complex topic to navigate (see what I did there… 🥁), but it is easy to see how reliability is crucial for global shipping.

• 🌍Geopolitics: A bit hypothetical at the moment, but geopolitical tensions are notoriously bad for commerce, and if one of the powers in the Arctic decide to create turmoil (see War on the Rocks article), that’s not going to be helpful.

Ok great, who cares?

Literally everyone should care.

Arctic shipping is not a very well known issue, but like many other aspects of the reconfiguration, it holds promise and peril for many of us. Let’s take a look at a few of those who should care:

• 🗺️Governments: As we’ve seen in the previous segment, the changes in the Arctic are well known to governments. The opening of shipping lanes in the Arctic essentially mean changes in nations’ ability to exert their power and influence.

• 🛳️Shipping Companies: As users of these new lanes, shipping companies have a vested financial interest in utilizing faster routes to destination, to lower costs and increase output. At the same time, many of them do understand the complexities and dangers of the changing Arctic climate. If you own a shipping company, you should probably start preparing for the coming Arctic summers.

• 🛒Retail Companies & Manufacturers: Put simply, if you rely on ships to move your cargo, the changing climate will most likely impact your operations, perhaps dramatically. You may not realize it, but you have a vested interest in the Arctic. Yes, you have an interest in shipping being faster and cheaper, but at the same time you may also have an interest in global stability and climatic stability.

• 🧑‍🤝‍🧑You and me: For everyday consumers (and people in general), the impacts of the Arctic will be nuanced, but in my view, significant in the long run. Sure, we may see shipping costs reduce, resulting in cheaper goods, but we should also be asking: Are we willing to pay the cost of military tension that could result in larger conflicts? Alternatively, are a few dollars knocked off your cool new sweater (and it is a fine sweater, I admit) worth the potential collapse of our natural systems?

Ok, that last point is a bit unfair. But not by much. The more we treat the Reconfiguration as a force of nature, the less we ascribe agency to ourselves and the less we are motivated to do something about it. Not every aspect of the Reconfiguration should be, or could be, prevented. But some aspects could be averted. The Arctic is a place where the Reconfiguration is treated as almost a force of nature, but it’s up to us how the region will take shape in the future: We can choose to collaborate in the Arctic and try to prevent further extraction of resources; we can choose to protect flora and fauna native to the Arctic, and we can always try to reduce our dependency on fossil fuels to try and mitigate the thawing of the ice🧊.

In a way, though, this is what’s most striking about the Reconfiguration: it’s where we need agency the most, we find ourselves caught in the (ice-free) undertow.

Next time we will explore another angle of the Arctic: Resources!

See you next time👋

“Really? It’s just a bunch of ice” you think. Well, you’re in for a surprise. You are going to participate in one of the greatest scrambles for power and resources in the coming decades: The race to dominate the Arctic!

Looking for Clues: Signs of the Reconfiguration in the Arctic🔎

The Arctic is a massive frozen tundra, stretching over 20 million kilometers and shared by countries like Canada and Russia. Yep, that's a whole lot of ice! 🧊

Despite the impression of a barren hinterland one gets, the Arctic is home to a complex ecosystem that includes bears, walruses, whales and other species of animals. But still, lots of ice. 🧊

The beautiful tapestry of wildlife and breathtaking views are not enough to make the Arctic a tourist attraction (except for the very brave and adventerous), given that the extreme conditions make it an unforgiving terrain for most of us. While not great as a tourist destination, the Arctic is plentiful with natural resources and strategic advantages to those who can tame it, and many countries already “smell” the potential.

A hidden race is afoot.

Still, as a recently dispatched Russian soldier to the Arctic, you find yourself with nothing but frozen tundra. Ok, fine, you get it. World powers, race, etc. etc. etc. But as you try to avoid hypothermia with 6,000 layers of clothing you realize there’s still something in the way. What is it? Well… it’s all the ice. 🧊🧊🧊

Clue #1: Enter Climate Change

Yeah, the ice is going away.

The Arctic is currently experiencing the full brunt of climate change, with rising temperatures causing both permafrost thaw and sea ice decline:

• Arctic sea ice is diminishing by roughly 66,000 square kilometers annually, and we can assume it is likely to get worse

• Summer ice is declining by 12% per decade, according to NASA

• The permafrost is also thawing at an accelerated rate, releasing methane into the atmosphere and destablizing the ground that sustains existing built infrastructure, such as roads, pipelines, and buildings

• The sustained thawing of ice and permafrost puts entire ecosystems in duress and has extensive consequences for the region and the world at large

Oh great, you’re thinking: “When can I take all of these layers of clothes off?”

While it may be a blessing for your deployment, the fast pace of thawing is not good news, potentially leading to catastrophic consequences on entire ecosystems, and potentially the world, including increased methane emissions and ocean current disruption (running AMOC, as they say).

But hey, maybe one day you’ll be able to patrol in shorts?

Clue #2: Increased Attention Towards the Arctic🪖

As the permafrost thaws and the ice slowly goes away, there is a “surprising” surge in interest in the region by world powers, in a manner that resembles competition for resources and hegemony.

You kind of knew it. What really tipped you off was sharing a bunk with a Chinese engineer and seeing American icebreakers with the fancy binoculars they finally approved for you to use.

So, to better understand what’s going on, let’s look at how three particular powers vie for control over the region:

Russia:

• Russian military documents highlight the Arctic's strategic importance.

• The 2022 Naval Doctrine clearly defines the Arctic as a key priority for Russia and is viewed, according to doctrine, as a theater for world power competition.

• In a similar fashion, the "Strategy of Development of the Arctic Zone of the Russian Federation and the Provision of National Security for the Period to 2035” document defines the Arctic as a key strategic region for resource extraction, infrastructure development and military action. Sidenote, don’t you just love the mouthful that is policy paper headlines.

I know what you’re thinking… It’s all talk🗣️ Well, not really:

• Russia has built hundreds of military bases between 2014-2019 in the Arctic, including airfields, stations, and missile defense systems 🚀

• Russia has been conducting military exercises with China (who else…) in the region and engages in heightened economic collaboration as part of a future Polar Silk Road

NATO and Uncle Sam:

Don’t you worry, NATO and the US aren’t exactly resting on their laurels (I’ll leave the geopolitical debate on adequacy aside):

• NATO is enhancing their military posture and increasing their military exercises in the region 🔱 (despite not having a coherent strategy…)

• Finland and Sweden’s accession to NATO is seen as a way to bolster its position in the Arctic and increase deterrence.

• The US is developing new infrastructure and investing in new capabilities in the region and modernizing its surveillance and technology infrastructure.

• The US is bolstering its military presence in response to Russian-Chinese efforts, per its updated 2024 DOD Arctic Strategy.

China:

China's Arctic interest signals significant developments, despite lacking direct access:

• For the first time, the Arctic is mentioned in the 2021-2025 Five Year Plan as part of a desire to create a Polar Silk Road.

• The Polar Silk Road idea was invoked, as China eyes new shipping routes, as an extension of the Belt and Road initiative.

• China has proclaimed itself a Near Arctic State (yes they made that one up, but go argue with China…).

• In collaboration with Russia, China invests heavily in economic projects, including LNG terminals and rare earth mineral extraction activities.

Clue #3: Everyone Else - Pile On!

If the involvement of world powers in the Arctic wasn’t enough, enter the private and non-profit sector into the mix. Unlike world powers, these actors are not looking for world domination, hegemony, or the ability to tax others. Rather, many of them want to avert disaster, influence the future, and of course make a quick buck.

Again, that’s not real news to you. You got the picture after the third Greenpeace activist you had to shoo away from your base, and after the 500th real estate agent that came to offer you a great deal on a property just 30 miles away, with a (frozen) lake view. Gee, that last one was relentless… But we digress.

So, let’s look at what’s happening on this front:

• Many NGOs are working to reduce emissions and apply pressure on countries and corporations to reduce the strain on the region and to reconsider their attempts to extract resources from the Arctic (hey Greenpeace, WWF, Ocean Conservatory I’m looking at you!)

• On the other hand, for many companies, an iceless future is a pot of gold 💰. Extracting resources and all.

• Still, not everyone is quick to jump into the ice-free pond. Many shipping companies have pledged to explore the region sustainably and reduce emissions under the banner of the Arctic Corporate Shipping Pledge. We’ll see how that goes…

Clue #4: Ships, Ahoy! 🚢

You are on your way to the land of nod, aboard the dream express, when suddenly a loud horn blast wakes you up. Grumpily, you take a look outside to see what derailed your gallant effort to get a wink. To your surprise, it’s a cargo ship. Hang on a second, there was a lot of ice there a minute ago, no?

Perhaps one of the most significant prizes for the winner in this race to dominate the Arctic is the control over shipping routes. In betting the ice will disappear (as is likely to occur), world powers are essentially wagering that new shipping lanes will open up, and in turn that will change global shipping dynamics. Some of these changes can be of global significance and may send shockwaves halfway across the globe.

The expected changes in shipping routes are the strongest clue, in my opinion, that Climate Change is the dominant culprit in the relatively sudden interest in the Arctic.

Among the primary shipping routes touted to open are:

• The Northwest Passage: Connecting the Atlantic and Pacific Oceans

• The Northern Sea Route: From the Kara Sea to the Bering Strait

• The Transpolar Sea Route: Connecting Europe and Asia over the North Pole

These routes, when ice-free (or ice-thin) provide shorter routes than the Panama and Suez canals offer today, helping to reduce shipping times and costs. Suddenly, betting on ice-free summers becomes a very lucrative one, and one with geopolitical importance.

Reconfiguration at Play: What the F is Going On?🤷‍♂️

After examining American, Chinese, and Russian activities in the Arctic, we can all ask the same question: What the F is going on? Why are they increasingly obssessed over this large chunk of ice 🧊? I mean, the world is big enough to fight over resources elsewhere.

In more ways than one, the increased attention to the Arctic is quintessentially reconfiguration at play:

• Climate change causes increased thawing of the Arctic, essentially revealing an ice-free future

• World powers, with Russia in the lead, take this development at face value and place a bet on what will happen next

• Everyone else is scrambling to gain points in the process

The shift in the Arctic represents a literal sea change and has the potential to shift global balance of powers. Instead of attempting to stop the impacts of climate change, world powers essentially accept the end result and reconfigure their actions, assets, strategies and positions to benefit, or at least avoid loss.

It’s easy to dismiss this as another scene of geopolitical tensions. However, looking at Russo-Chinese ambitions to establish a Polar Silk Road show that there is much more than meets the eye. Of course, these developments are studied by multiple organizations. One notable example is the Belfer Center’s blog post on the topic, eloquently describing the dynamics of the changing Arctic.

Unlike many other geopolitical races for control, this one is primarily driven by Climate Change. If not for Climate Change, there wouldn’t be a shift in the availability of shipping lanes and resources, and there would likely not be much impetus to battle for control over something that is probably not going to happen.

Ah, great. Now you get the full picture. You’re still cold, though, and fending off real estate agents.

The Big Picture 🖼️

Seeing the race for the Arctic in the context of Climate Change helps us see a unique way our planet is changing, and more importantly, how human systems are reacting.

We are used to responding (and rightfully so) to climate change with the question of “what can we do to prevent it?” or asking “how can we adapt?” In a way, what is happening in the Arctic is in line with the latter, but the race that is afoot better fits a different question entirely, which is “assuming this will happen, what should we do to get ahead?”

As we continue to explore the reconfiguration of our world, this question will appear in many forms and variations. The dynamics of particular situations are… complex at best. Still, a few things will be apparent as we continue our journey:

1. No one is waiting for the climate to change. Rather, it seems many players are working hard to get ahead of the curve.

2. There is no “big conspiracy”. Rather, this reconfiguration is a result of many players reacting to the changing climate.

3. Climate Change’s role changes from one instance to another. In some cases, like in the Arctic, it is the driver of a change, and in others it is part of more complex feedback loops.

4. Like it or not, it’s happening.

To be clear, the changes in the Arctic are both disheartening and dangerous for our planet and our existence as a species, but it’s hard to deny that it is happening, and that an increasing number of countries, companies and people are beginning to adapt.

This is the reconfiguration of the Arctic.

That’s it for this time!

As always, if you have comments, disagreements, or a desire to throw tomatoes 🍅 at me - reach out! I would love to engage and discuss further!