0 0

The Arctic has drawn attention of many state actors around the world, predominantly those with territory within the Arctic Circle or those bordering the circumpolar region. Different stakeholders within the region have dissimilar interests. On one hand, the Arctic is endowed with a variety of natural resources, which include mineral resources, such as phosphate, bauxite, iron ore, copper, nickel and diamonds, but also rare earth elements, like Neodymium, and other critical minerals, such as Cobalt.¹⁾ On the other hand, local communities have incorporated the abundant marine life as a vital part of their economies, with the pelagic fisheries being a very important segment of their revenue.²⁾ The paradox in this case is that the rapidly increasing demand for mineral resources, which drives mining and other resource exploitation activities, results in a degradation of biodiversity, as (deep-sea) mining activities can have serious environmental impacts.

A panel about business in the Arctic quickly turned into a discussion about the new EU Arctic Policy during the Arctic Circle Assembly 2021 in Reykjavík. Photo: Trine Jonassen

One of the international stakeholders that is seriously invested in Arctic affairs is the European Union (EU). The regional bloc had already outlined three main reasons for seeking involvement in Arctic affairs during the articulation of its first Arctic policy statement back in 2008.³⁾ The first one is sheer geography, as the northernmost regions of Finland and Sweden are Arctic regions and hence these two EU Member States participate in all Arctic-related fora, conferences and alliances. Moreover, Europe, and consequently the EU, is heavily industrialized, and due to its proximity to the Arctic, this has far-reaching environmental and societal ramifications. The second one is the environment, as the Union is responsible for 8% of the greenhouse gas (GHG) emissions, but also for 36% of the black carbon that is deposited there. These two reasons are inherently connected, as the industrial activity of the EU is contributing to the reverberations on the Arctic environment.⁴⁾ The third one is the economy, as the EU has been acutely dependent on oil and gas from Norway, natural gas from Russia (before the war on Ukraine), as well as gold, titanium, nickel and consumes one-third of the Arctic and Sub-Arctic fisheries produce.⁵⁾ It can be maintained, hence, that the Arctic is a region of strategic importance for the EU and an important element of the foundations of its economy. Taking this into consideration, the EU’s Arctic policy was further revised in 2012, 2016 and 2021. Nonetheless, in light of recent changes, a new European Commission that will be in place after the 2024 elections for the European Parliament might consider another update on the EU’s Arctic policy. Taking this into account, it is important to examine what kind of revisions should be made and what should be the direction of the amended policy, with the ultimate goal of addressing the main system-related issues that the Arctic is facing. These issues are, namely, the effects of climate change on the environment and the economy, as well as the way the changes in the political decision-making arena are affecting the environmental, societal and economic landscape of the Arctic.

All of these issues ought to be dealt with as a system. A system can be understood as a group of interacting elements that constitute a complex and integrated whole.⁶⁾ This can be considered to describe the different elements that the Arctic policy is tackling and, taking this into account, a systems approach would be largely useful to increase the Arctic policy’s efficiency.

Taking into consideration that the shift in the geopolitical world order has brought upon us a major energy crisis, but also the fear that this energy crisis might potentially have adverse effects on the pace of the energy transition, resulting in an even higher climate crisis, it becomes given that there is a large interconnection between different sectors in the form of a system. This means that only a policy that addresses this complexity and treats the Arctic as a complex system can be successful in reaching policy goals. Therefore, a systems-thinking approach ought to be adopted, with the objective of finding (new) ways to ameliorate the existing EU Arctic policy. The main challenge for policy-making methodology is how to incorporate systems thinking. In this article, I propose possible pathways and approaches. First, a comprehensive analysis of systems thinking and its application in policymaking is needed, before diving into the EU Arctic policy, and finally, outlining how the policy can be enhanced with the right set of tools based on a systems-thinking approach.

Introducing systems thinking

Systems thinking is an analytical framework and approach that provides a more integrated perspective as well as a set of proven concepts, tools and methods to improve our understanding of the complex systemic issues which threaten the future.⁷⁾ Systems thinking was rendered by the OECD as a unique way to address planetary emergencies in the environmental, socio-economic and political realm, as it brings the issue of interconnectedness into the table. This means that every grand challenge (e.g. climate change, water-food-energy security nexus) is treated like a system, where each stakeholder has its own perspective and interests. Various stakeholders and their interests are being organized into different systems, so that the key relationships are recognized, alongside the perspectives of multiple actors. Having a clear understanding of each actor’s position on the decision-making arena helps to find the optimal set of policy tools, so that the outcome for each stakeholder will be the best one possible.⁸⁾

Systems thinking encompasses a holistic approach to analyses that focus on the way different subsystems interact in the context of a broader, larger system. In policymaking, applying systems thinking in policymaking translates to two main policy paths.⁹⁾ The first one is the increasing attention to feedback mechanisms, which encourage public participatory approaches that can be implemented via interactive workshops and innovative inclusive ways to acquire the opinion of all stakeholders, including tools and formats such as living labs. Living labs are open innovation ecosystems using iterative feedback processes throughout a lifecycle approach of an innovation to create sustainable impact. Another way to facilitate the inclusion of stakeholders is the incorporation of citizen science into research and evidence-based policymaking. The second path involves modeling approaches to increase the strategic foresight capacity.¹⁰⁾ The evolution of four chief modeling tools in particular has put systems thinking at the center of policy making:

1. Stochastic optimization. Stochastic optimization is an analytical, modeling method that generates and uses random variables. When resolving a stochastic problem (i.e. a problem where some input data is uncertain), all variables are generated randomly, but also the functions that are used to resolve the problem are generated randomly. In modeling and simulation in policymaking, it introduces the element of randomness, meaning that each policy is tested under scenarios with variables that are generated in a haphazard manner.¹¹⁾ This caters to uncertainty analysis and brings the element of robustness into decision-making, enabling decision-makers to anticipate numerous potential scenarios and prepare accordingly for them.¹²⁾ This can be highly applicable to natural disasters and other environmental issues, but also to land-use planning. In the Arctic, it can be used as a tool to examine how the livelihoods of Indigenous peoples will be affected during the climate change era, as major disruptions are expected.¹³⁾
2. Agent-based modeling (ABM). ABM includes simulations of different agents (e.g. people, countries, companies, organizations) and the interactions between them under different scenarios.¹⁴⁾ This can be a useful tool to account for bounded rationality that may appear when making decisions.¹⁵⁾
3. Evolutionary game theory. This is a part of game theory, where the strategy of each actor changes within time and its interactions with other stakeholders are also altering. It adds a framework of contests between all involved stakeholders, in which Darwinian competition is modeled.¹⁶⁾ It is basically an approach that takes into consideration the multiplicity of agents, as well as strategic interaction.¹⁷⁾ This is highly suitable for solving issues of geopolitical nature. In the Arctic context, the EU can utilize evolutionary game theory tools to better understand Russia’s outreach in the region, predominantly with regard to the environmental impact of activities such as mining or shipping.
4. Social network theory. Being a specific type of the overall network theory, the social network analysis examines the relationships and social structures that exist between different social and political entities.¹⁸⁾ These can be companies, countries or even organizations of citizens. As the broader network is developed and the agent is positioned within it, it helps to better understand which trade-offs exist for each policy. In this way, the policymaker has a somewhat clearer map on what to expect with the choice of the different policies that are being considered. Thus , policymakers are expected to avoid pitfalls.¹⁹⁾ This is also an excellent way to monitor the EU’s position in the strategic chessboard in the Arctic and to examine the role of actors such as Iceland and Norway in potentially monitoring Russia’s outreach in the Arctic and North Atlantic and in ensuring a sustainable and stable Arctic in the long-term. Social network theory could also be helpful in simulating the socio-political dynamics of countries such as Russia, in order to anticipate potential social unrest that might emerge within the country.

Before having a better glimpse at how the foregoing policy tools can be adapted in the EU Arctic policy, an assessment of its revisions, with regard to the systems thinking approach, is useful.

How the EU Arctic Policy “started”

As discussed earlier, there have been major shifts in the environmental, economic and societal policies of most countries around the world over the past years. The pandemic, followed by the war in Ukraine and the ensuing energy crisis, combined with revised climate policies, has resulted in several countries reconsidering their climate change mitigation efforts and climate actions at the global scale.²⁰⁾ Arctic policies have not been revised as often ever since the pandemic, following these shocks. More precisely, the EU revised its policy in the Arctic after the pandemic, but before the Russia’s invasion of Ukraine. As already highlighted above, the first Arctic-related document was issued in 2008 and was centered around three key objectives, namely:

• Protecting and preserving the Arctic in unison with its population, which can be expressed through several means.
• Promoting sustainable use of resources.
• Contributing to enhanced Arctic multilateral governance, which would include collaboration between the EU and the EEA EFTA, and the rest of the Nordic countries.²¹⁾

Arctic policy revisions and their relevance to systems thinking

Following the initial iteration of the EU Arctic policy in 2008, the first revision was made in 2012. A Joint Communication was presented that focused mostly on the responsible and sustainable development in the region based on three principles, namely knowledge, responsibility and engagement.²²⁾ The second revision took place in 2016 amidst Russia’s aggressions and the annexation of Crimea, which led the EU to add a geopolitical component within its Arctic policy statement. The reason was that the revised agenda elaborated on pursuing selective engagement with Russia and China, an approach which was also a part of the Global Strategy of the EU.²³⁾ The Global Strategy is also being pursued through the Open Strategic Autonomy concept, which aims at increasing Europe’s self-sufficiency and independence in critical areas whilst remaining open to trade and collaboration. This gradual shift in Europe’s foreign policy created a different approach towards the Arctic compared to the previous iteration of the EU’s Arctic policy, which did not address the issues of competition with actors such as Russia and China. It is important to point out that this different approach is not only pursued at an EU level, but also separate Member States have started pursuing this approach.²⁴⁾ The Communication also reiterated the need for the EU to jointly pursue and build upon the three main objectives that were set in 2008, but also to continue the focus on sustainable development that was placed in 2012.

This was then followed by the most recent revision in 2021, also delivered through a Joint Communication.²⁵⁾ The 2021 document added the elements of the European Green Deal (EGD) to the EU’s Arctic agenda, looking to address various causes of climate change and environmental degradation in the Arctic, including plastic litter pollution, black carbon, and chemical pollution, while it also dedicated more attention to the impacts of climate change on the Arctic, such as the thawing permafrost. It should be pointed out that climate change and environmental degradation were also discussed in the previous EU policy statements, but the 2021 Joint Communication considered these issues in a more extensive manner.²⁶⁾ It also included calls for action so that the policy becomes even more inclusive with regards to Indigenous peoples. More specifically, there were pledges that they would be included in the implementation of new EU green policies in the Arctic, including different components of the EGD.²⁷⁾

What the 2021 document failed to account for, however, was the fact that inclusive and sustainable development entails environmental, societal, economic and political dimensions, which mandates the need to resolve these aspects as a system. At the moment, most issues within the Arctic policy statement are considered in a fragmented, singular manner. Hitherto, monitoring and controlling environmental pollution and all its adverse effects on local communities and the economy needs to be addressed through systems thinking. Finally, following the Russian invasion of Ukraine, the EU officially stated that it joined Member States and key like-minded partners in suspending Russia and Belarus from activities of various regional cooperation frameworks in the Arctic. This happened through several joint statements the Union issued as part of the Northern Dimension policy, the Barents Euro-Arctic cooperation and the Council of the Baltic Sea States.²⁸⁾ These changes are considered to have serious ramifications on the EU’s engagement in the Arctic.

Existing gaps and challenges

Summing up the approach of the EU towards the Arctic so far, two notions are prevalent. The first one is that, although there are regulatory provisions and willingness as highlighted in the Union’s Arctic policy statements, there is little action that has been taken for accountability of private actors and public state bodies in the Arctic. Accountability for all actors is very much relevant to systems thinking. An example is an oil and gas company that operates offshore, and its actions can have far-reaching reverberations on the environment, or they might not abide with international law and cause geopolitical conundrums, showing again the interconnectedness and the need for a systems-approach even with respect to the accountability of companies and state actors. The offshore oil and gas safety directive (2013/30/EU), for example, has introduced reporting requirements, which is a step towards the right direction.²⁹⁾ However, reporting requirements should include comprehensive societal impact assessments, as well as economic appraisals that will involve inclusive processes and treat the Arctic, with all its stakeholders, as a system. A step towards that direction is already being taken, considering that legislators have started working on the implementation of the corporate sustainability due diligence directive, proposed by the Commission in February 2022.³⁰⁾ This is expected to incorporate the majority of the aspects of sustainability, and hence, it might be a significant step towards addressing the aforementioned need for better impact assessments. The second prevalent notion is that the geopolitical dimension of these policies is limited to only certain countries, not taking into consideration all of the state actors involved in the Arctic. However, even for the countries that are being considered in the EU Arctic policy, it is treated as a separate issue and not in connection with energy, a key sector that is also the main area of operation of many energy and mining companies in the Arctic, which are active in sectors like offshore drilling. The geopolitics of energy and, in particular, the energy transition have been considered by European policymakers and decision-makers to be paramount when formulating a neighborhood or foreign policy, as the EU is an energy import-dependent economy, hence the energy transition is rendered as a matter of security.³¹⁾ In this case, the correlation between geopolitics, climate change and the energy transition is strong and, as these aspects form a system, a wise policy ought to address them as a system. Examples of systems thinking can be found in the 2021 update, which takes into account collaboration with Canada and the United States on strategic foresight in climate change issues, as well as cooperation on research and mineral resources with Canada and Greenland.³²⁾ Despite the fact that even before 2021, collaboration with the North American countries was mentioned in the EU Arctic policy, this was the first time that it involved cooperation on climate change strategic foresight. Considering the current shift of the geopolitical world order, there is a need for revision of the EU approach with respect to strategic foresight, with the aim of enhanced collaboration. The energy sector is a highly politicized topic and the Arctic is a resource-rich region, containing all resources necessary to power the energy system, from gas to rare earth metals and other critical/important minerals.³³⁾ With regards to rare earths, in particular, Greenland has been highlighted in the recent IRENA report³⁴⁾ as a key emerging actor for cobalt and neodymium, both of which are paramount for the energy transition and currently without any alternative materials that could replace them.³⁵⁾ It can be understood that this also constitutes a system and hence a systemic approach might be a necessity for the EU Arctic policy. Having a clear idea on what a systems-thinking approach can look like in policy making, it is of great interest to explore how it can be adapted for the EU Arctic policy.

How can complex systems thinking help address the challenges of the EU approach to the Arctic

Systems thinking can provide a plethora of tools for policymakers, including those working on the EU policy towards the Arctic. Even though the existing policy comprehensively addresses the main issues, the shift in geopolitics that the war in Ukraine has brought, in tandem with the acceleration of climate change and its adverse effects on the environment, the society and the economy, shows that a revision of that policy would be useful. This could prove to be an opportunity to introduce systems thinking and there are several ways of doing that.

Enhancing accountability through participatory process: multiple indicators assessment

The first set of policy levers includes the reporting standards and accountability of companies operating in the Arctic. The standards should be more comprehensive and include multiple indicators for the assessment of operations such as offshore oil and gas. Sophisticated means should be used especially to measure impact on marine and land biodiversity, as well as the livelihoods of local communities. The abovementioned offshore oil and gas safety directive is a good example, as it sets guidelines of good conduct and safety standards, with regard to companies that operate in the Arctic. However, a similar legislation ought to be issued on biodiversity. With such a legislation, all oil and gas activities in the Arctic, as well as other activities, will have to be accompanied by reports of their impact on biodiversity and standards will be set so that biodiversity is preserved. The structure of such a legislation could be similar to the proposal for the directive of corporate sustainability due diligence. In this way, respect towards biodiversity takes place, with very specific indicators and thresholds that should not be surpassed by any private actor. With regard to biodiversity, the EU already is a party to the Central Arctic Ocean Fisheries Agreement, as well as participated in the negotiations on the conservation and management of marine biodiversity in the areas beyond national jurisdiction (BBNJ Treaty, recently adopted and currently awaiting ratifications and entry into force). The BBNJ Treaty is especially important, as the agreement is aligned with the Global Biodiversity Framework, according to which at least 30% of the oceans need to be covered by some form of biodiversity conservation measures by 2030. Within the Arctic, the treaty is particularly relevant for the Central Arctic Ocean. These are already major steps to preserve Arctic biodiversity. In the next Arctic policy statement, it would be useful that these pledges are converted to indicators and added into the guidelines for good conduct by companies and public bodies that are EU-based and operate in the Arctic. The main reason that such a measure would benefit the incorporation of systems thinking in the Arctic policy is that the BBNJ Treaty enhances the holistic approach to high seas biodiversity and introduces stronger and more comprehensive impact assessment procedures. This is highly aligned with the vision of a systems thinking framework in the Arctic. It ought to be pointed out that the EU already works with biodiversity indicators, in some cases in the Arctic, with an example being the EU Biodiversity strategy, which focuses on protected areas of high environmental interest.³⁶⁾

For the biodiversity policy area, another element of systems thinking could be utilized. More precisely, there may be a need to increase interactive participatory engagements that take the views of local communities and Indigenous peoples into consideration would be helpful. Such projects/initiatives would include novel approaches, like the World Cafe methodology, where different stakeholders are brought together to discuss a specific issue their community is facing, come up with solutions, policy recommendations and formulate a roadmap for the future. Similar participatory methods can be used, including policy ideation and avatar stakeholder workshops. During the policy ideation workshop, stakeholders from the public and private sectors, as well as civil society, initially, critically assess the existing policies. Later, the challenges that are being faced because of the implementation of each policy are clearly defined. In the next step, ideas on how to remedy these challenges are elaborated in brainstorming sessions. These ideas are evaluated and, based on the evaluation, new amended policies are generated. Based on these inputs, the optimal system is designed. Finally, through these participatory sessions, data can be harnessed for modeling and simulation of different scenarios for the Arctic. The difference with the current state of affairs is that presently such processes only take place through funded projects, such as the EU-PolarNet and these programs operate for a limited time, which creates potential issues for continuity of these stakeholder engagement efforts. These should be converted to standard practice and become a source of data to inform policymaking and decision-making. Another difference is that, so far, the EU Arctic policy both in 2008 and its revision in 2021 have called for inclusive dialogue and meaningful participation of all stakeholders, but also have acknowledged organizations that promote participatory processes, such as the Arctic Mayors Forum, as well as the dialogue spaces organized by the EU-Arctic Stakeholders Forum and the Indigenous Peoples’ Dialogue. However, initiatives so far have only been taken at a high level, while at a low-level cooperation is supported only within projects’ framework. This needs to be converted into a coordinated long-term engagement, in which systems thinking policy tools have a major role to play.

Modeling and simulation for strategic policy intelligence

Innovation in computer science has given ample opportunities for development of the digital dimension of systems thinking in policymaking. The most important tool that has been used for that purpose is modeling and simulation. More specifically, computational power can be used to create models that gather input from multiple sources and, through simulation, convert the results of these simulations into meaningful policy insights. ABM models can now take account of virtually all state actors involved in the Arctic and create future scenarios related to the climatic, environmental, societal and economic situation above the Arctic Circle. The updated regional policy on the Arctic pointed out the three main challenges, namely: climate change, peaceful cooperation and demographic decline. ABM can be very useful to model all three challenges as, through simulation, there is a high chance that new solutions can emerge regarding the policy options and better-informed decisions are going to be made by EU policymakers.

Evolutionary game theory can be used to understand how the geopolitical landscape evolves, based on the actions that Russia or China might take. The fact that the EU had initially ceased communication with Russia through all Arctic-related channels leads to further blurring of what the next Russian actions might be. Recently, there have been interactions on an Arctic Council level between European stakeholders, such as the members of the Norwegian Chairmanship, and Russia, with the main objective of resuming the activities of the Council.³⁷⁾ However, there have been no actions taken that would change the current frozen state of relations between the EU and Russia. This is why a proper intelligence analysis, using sophisticated modeling and simulation tools, such as evolutionary game theory or social network analysis, will be highly useful. However, for such a policy to be successful, it is paramount that the development of the EU policy on the Arctic includes experienced professionals capable of developing the models and understanding their outcomes. This is why it is recommended that the future revised EU Arctic policy includes the inauguration of a Strategic Policy Intelligence unit, specialized solely on Arctic affairs. Currently, there is already a strategic foresight unit within the EU, which conducts research and provides elaborate annual reports on what the EU should expect in the future. However, a separate department should be established, focusing solely on Arctic affairs and especially on strategic policy intelligence, instead of strategic foresight. It should be noted that this will be a very challenging task to implement, given that there are no such sub-regional strategic foresight units in the EU, as yet. While strategic foresight essentially considers what the future might hold and reverse engineers that future into the present situation, to understand what should be done, strategic policy intelligence uses the current situation (and its intelligence) to provide decision-makers with a set of policy options and their repercussions. Then the decision-makers select for the best choices that take into account as many of their strategic priorities as possible. It is a much more realistic implementation of a strategic plan and hence would make a difference in the Arctic policy.

Finally, the modeling and simulation part, combined with the public participatory process, can really benefit the environmental dimension of the EU Arctic policy. Environmental degradation is primarily a result of human activity, which largely depends on demographic and socio-economic factors. Hence, it would be useful that stochastic optimization and ABM models are developed to comprehend the ramifications of actions such as offshore oil and gas extraction, as well as minerals extraction in regions like Greenland. Correspondingly to the cases of ABM and evolutionary game theory, the input can be gathered through participatory approaches in all communities, such as living labs, using citizen science and interactive workshops. Greenland can set the perfect example, where the effects of mining activities on local communities, Indigenous peoples, as well as local SMEs can be examined and, later on, modeled.

Conclusion

This paper sought to examine which of the EU Arctic policy’s aspects can be ameliorated using systems thinking. Evaluating the trajectory of the EU Arctic policy, from its inception in 2008 until 2021, reveals several positive traits, especially with regard to the climate change and environmental approach. The EU has encouraged sustainable practices promoted towards all public and private actors in the Arctic and even launched a strategic foresight program in collaboration with Canada and the United States. Also, the EU Arctic policy has gradually included a geopolitical dimension, which is a pragmatic approach, following its strategy of exercising caution with respect to Russia and China. However, the pace at which changes are taking place globally in the aforementioned sectors is accelerating and this is making the revising and amelioration of the policy a very important topic.

Overall, this article attempted to show that systems thinking can support the EU Arctic policy and help reach its goals via action along two axes. The first involves modeling and simulation and has to do both with strategic foresight and with geopolitics. For the former, systems thinking can provide strategic policy intelligence, outlining all the possible scenarios that can occur and preparing in a better way the European decision-makers. For the latter, it can provide meaningful insights regarding the behavior of Russia and China, so that aggressive behaviors are anticipated. The second axis includes a more inclusive public participatory process. There are several novel participatory methodologies, such as the World Cafe and citizen science concepts, as well as living labs, that might prove to be useful for gathering better insights about the environmental, socio-economic and ethical impacts of policies. The outputs of these processes can also function as a feedback loop that can support the modeling and simulation tools. In order to bring these changes, specialized personnel will need to interact with local and national policymakers in the Arctic, so that the scientific and innovation background on modeling and simulation can be put into the Arctic context.

A point that ought to be made here is that the incorporation of systems thinking with a regional policy, such as the Arctic one, is a substantially large topic that would require comprehensive research. The main idea of this paper was therefore to highlight the main points that deserve attention for further development in terms of methodologies and policy-making practices. Each tool mentioned here would be useful to be considered in strategic and analytical policy work and each methodological tool should be taken into account for further research. The aim of this paper was to encourage the discussion on integrating systems thinking into the EU’s policy-making for the Arctic. The Arctic can also be the starting point for incorporating systems thinking in EU policy making overall, if EU decision-makers perceive the benefits of implementing systems thinking approaches.

Dimitris Symeonidis is an energy policy and geopolitical risk advisor and researcher, specialized on the circumpolar regions, and the founder of the Decentralized Solutions Global Network.

References[−]

About Post Author

Editor

editor@arcticwatch.info

Happy

0 0 %

Sad

0 0 %

Excited

0 0 %

Sleepy

0 0 %

Angry

0 0 %

Surprise

0 0 %