Download ECONOR - Arctic Frontiers

ECONOR III report
The Economy of the North 2015
Solveig Glomsrød, Gérard Duhaime and
Iulie Aslaksen (eds.) and Lars Lindholt
and the ECONOR network
ECONOR –
“The Economy of the North 2015” –
integrating circumpolar knowledge
on economy, social conditions and
environment, for managing risk in
policymaking
Arctic Frontiers
Tromsø
25 January 2017
1
The Economy of the North – ECONOR
•
•
•
•
•
•
•
An overview of Arctic circumpolar statistics on economy and
socio-economic conditions
Data not easily available at a circumpolar level
Harmonize Arctic statistical data across national borders.
Funded by Norwegian Ministry of Foreign Affairs, Nordic Council
of Ministers, participating institutions and AMAP-Arctic
Monitoring and Assessment Program
Supported by the Arctic Council Sustainable Development
Working Group (SDWG): Norway, Canada, USA and Saami
council
Editorial group - Statistics Norway, CICERO, Université Laval
ECONOR reports in 2006 and 2008, now updated 2015
Photo: Photos.com
Photo: Tom Nicolaysen
2
The ECONOR network
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Alexander Goncharov, Federal State Statistical Service, Russia
Gérard Duhaime, Université Laval, Canada (co-editor)
Andrée Caron, Université Laval, Canada
Helen McDonald, Statistics Canada
Ilmo Mäenpää, University of Oulu, Finland
Birger Poppel, Ilisimatusarfik, University of Greenland
Marianne Eriksson (tbc), Statistics Sweden
Scott Goldsmith, University of Alaska at Anchorage, USA
Davin Holen, University of Alaska at Fairbanks, USA
Andrey Petrov, University of Northern Iowa, USA
Edita Zahirovic, Statistics Norway
Lars Lindholt, Statistics Norway
Solveig Glomsrød, CICERO (chief editor, co-project-leader)
Iulie Aslaksen, Statistics Norway (co-editor, project leader)
In addition: Many statisticians, researchers and experts have contributed to the report
3
The Economy of the North – focus of ECONOR
•
•
•
•
•
•
•
Arctic natural resource extraction gives income opportunities – and Arctic naturebased livelihoods are strongly impacted by global economic development and
climate change.
Petroleum analysis
Tourism in the Arctic
Arctic hot spots – mining and land use conflicts
Local importance of natural resources: subsistence activities of indigenous
peoples and other local people – intertwined with the money economy
Add a human dimension to the economic picture - social indicators and
subsistence activities
Impact of economic activity on land use and biodiversity - GLOBIO
Arctic Catfish, Market in Nuuk, Greenland
Photo: Tom Nicolaysen
4
Russian Arctic zone change:
Not included:
Karelia, Khanty-Mansii and
Magadan
Included:
Krasnoyarsk and Nenets AO
5
Comparing GRP (Gross Regional Product)
and DIH (Disposable income of households)
To what extent are
the values from
natural resources
taken out of the
Arctic region?
Authors Chapter 3: Ilmo Mäenpää, Solveig Glomsrød, Wei Taoyuan
6
Arctic petroleum extraction under climate policies
Presentation of ECONOR
“The Economy of the North 2015”
Chapter 5
Lars Lindholt and Solveig Glomsrød
Arctic Frontiers, Tromsø, 25 January 2017
Presented by Iulie Aslaksen, ECONOR co-editor
7
Climate policy scenario
• How might future Arctic oil and gas production
develop under climate policies?
– Possibly increased demand for natural gas, in power generation
where it can substitute coal.
• Will climate policies lead to lower producer
prices for coal and higher producer prices for
gas – and hence higher demand for Arctic
gas?
– Natural gas also subject to climate policies, ambiguous trends
influence the future market for natural gas.
• What about oil prices? What will OPEC do?
8
Arctic petroleum reserves and uncertainties:
•
The Arctic has almost a quarter of global undiscovered petroleum resources
– Oil 11 per cent
– Natural gas 26 per cent
•
Uncertainties for future Arctic petroleum production:
• Competition from other regions: Global production of unconventional oil and gas (in
particular US), huge conventional gas reserves in the Middle East (in particular Iran and
Quatar)
• Extraction technology: High costs in Arctic petroleum projects and long lead times
• Arctic nature conditions: Even with open Arctic waters in summer, petroleum production in
the Arctic is facing harsh weather conditions
• Infrastructure for transportation: Arctic petroleum production expected to take place
offshore and in more remote areas lacking infrastructure for transportation
• Future climate policy: 1.5 °C target.
9
Climate policy impacts on Arctic petroleum:
•
Climate policy scenario: Reach the 2 °C target, not to exceed 450 parts per
million (ppm) in the atmosphere. Aiming for 1.5°C.
•
Reference scenario towards 2050 in line with the New Policy Scenario in IEA
World Energy Outlook 2014.
• Climate policy is represented by a global CO2-price, initially leading to
reduced demand for fossil fuels. CO2-price USD 100 per ton in 2030 and USD 140 in 2040 in
most OECD-countries and somewhat lower in Non-OECD.
•
The CO2-price has far stronger effect on coal as it is more carbonaceous
than oil and gas.
•
•
Main result:
•
•
The CO2 price may increase demand for gas to substitute for coal.
The Arctic may not lose petroleum revenues from a global climate
agreement:
Oil prices do not fall as much as expected, as OPEC may reduce production
to ensure roughly the same price of oil as without a climate treaty.
10
FRISBEE global petroleum market model
•
Recursive, dynamic partial equilibrium model for fossil fuels (oil, gas and
coal), renewables and electricity
•
Demand = D (end-user prices of energy, population, GDP per capita, AEEIAutonomous Energy Efficiency Improvement)
•
Five Arctic regions: Alaska, Arctic Canada, Arctic Norway, Greenland and
Arctic Russia.
•
Each region has three end-users: Industry, households (incl. services) and
power producers
11
Figure 5.1. Arctic gas production. Reference scenario and climate
policy scenario. Mtoe.
Authors Chapter 5: Lars Lindholt and Solveig Glomsrød
12
Figure 5.2: Regional distribution of West Arctic gas production.
Reference scenario and climate policy scenario. Mtoe.
Authors Chapter 5: Lars Lindholt and Solveig Glomsrød
13
Table
1 and 2. Arctic gas production.
Table 1. Increase in accumulated gas production 2015-2050. Climate policies scenario.
Deviation from reference scenario. Per cent.
Total Arctic
Greenland Russia
Canada
Alaska
Norway
+12
+98
+28
+51
+11
+10
Table 2. Arctic gas in relation to MENA and global production. Reference scenario and
climate policies scenario. Per cent.
Arctic share of total
Reference
Climate
scenario
policies scenario
2015
2050
2050
27
23
24
22
11
13
production outside Middle
East/North-Africa
Arctic share of world gas
production
14
Figure 5.4. Oil price scenarios. USD (2014 prices)/boe
120
100
OPECs optimal oil price reference scenario
80
USD/boe
OPECs optimal oil price with climate policies
60
40
20
0
15
Greenland:
Mackerel carries climate change impacts into statistics
Authors Chapter 4: Solveig Glomsrød, Ilmo Mäenpää, Lars Lindholt and Helen McDonald
16
17
Socio-economic indicators
Preliminary version
18
Preliminary version
19
Subsistence economy
Local and cultural importance of natural resources
and land use:
Subsistence activities of indigenous peoples and
other local people – intertwined with the money
economy
ECONOR: Case studies
20
21
Subsistence economy in Alaska: Compostion of wild food harvest
Alaska Department of Fish and Game is required by law to scientifically quantify
harvest of wild resources by rural residents.
Author in Chapter 6: Davin Holen
22
23
24
Policy relevant results from ECONOR:
• Large variations in livelihoods and
living conditions between Arctic regions
• Crucial role of petroleum industry and
other natural resource extraction as
source of income
• Nature-based livelihoods: The
importance of subsistence and local
market economy
• Need to explore uncertainty, resilience
and sustainability
• Need for systematic circumpolar
statistical knowledge on economy,
socio-economic conditions and
environmental impacts for Arctic
regions.
Siberian women trying to supplement their
household budget by street selling.
Photo: Gérard Duhaime
25