Melting ice provides Greenland with an economic lifeline. Should it grab hold?

It seems to be a modern-day pilgrimage for those who fear global warming's impact: go to Greenland and witness the melting glaciers before they disappear.

If you're lucky, you can hover above the oft-lamented glaciers (in a carbon-emitting helicopter), ruing humanity's impact on the landscape.

Poor Greenland. It is often portrayed as a tragic, innocent victim of man-made climate change – one of the nations that, along with remote Pacific islands, will suffer the worst consequences of a warmer planet – all because of the greed of rich nations.

The ice will melt, and local hunters will have their way of life undermined.

There's another side to this story, though. This supposedly doomed nation just sought and gained more autonomy.

Greenland has been associated with Denmark since the 18th century, and has existed since 1979 under home rule. But in a ceremony in Nuuk a few weeks ago, Greenland shifted to self rule, and is on a slow path toward eventual autonomy.

This is not a case of the Kingdom of Denmark abandoning the world's largest island to melt. The inhabitants of Greenland voted for self-governance in a referendum last year.

What makes this nation, with 58,000 people and two traffic lights – and whose biggest import has been $NZ877 million in annual financial aid from Denmark – believe that it can cope all by itself?

The simple answer: the scientific consensus on global warming.

As Der Spiegel puts it, "while the world worries about climate change, [it] is triggering great hopes in Greenland."

The icecap covers 80 percent of Greenland. Melting ice will unlock trapped resources. There's gold, diamonds, coal, and zinc. And an estimated 110 billion tons of oil. That's a lot of oil.

As Greenland earns more, Denmark will decrease its aid. If oil revenues exceed 6.5 billion kroner (about NZ$1.9 billion a year), the aid can stop altogether, and Greenland can afford to become fully independent: a brand-new nation born out of climate change.

Hopefully, the money Greenland makes will be put to good use. (There is a precedent for this: sensible Norway got rich off oil, but didn't splurge).

In Greenland today, one in three children is reportedly a victim of domestic violence. Alcoholism is prevalent. Twenty percent of girls 15 to 17 years of age have attempted suicide, indeed a fifth of all young people have seriously thought about killing themselves. Up to 70 percent of all young people do not finish school or learn a profession.

There is serious social dysfunction in Greenland, and a stronger economy and social welfare system would surely diminish some of the problems.

But the prospect of oil riches poses some tough questions.

Greenland's potential reserves are enticing because, perversely but inevitably, heightened fear of climate change has encouraged a drive to tap new sources of petroleum, instead of encouraging research and development into green alternatives. Isn't that the big problem here?

Building just one proposed aluminium smelter would apparently double the carbon dioxide output of the entire country. Paying for carbon offsets would cost this fragile nation a fortune. So, should Greenland (which contributed next-to-nothing to the carbon emissions that caused the problem of global warming) be allowed to opt-out from the carbon reduction treaty that will be negotiated by world leaders in Copenhagen this December?

The Danish government – still responsible for Greenland's foreign policy – says no. But couldn't Greenland argue – as developing economies China and India do – that it's unfair to put it at such a disadvantage in its time of growth, given that today's rich countries developed without such hurdles?

Some even argue that we, the inhabitants of richer countries, should pay the likes of Greenland not to develop their oil wealth.

In Europe, Greenland pops up in the news in occasional stories about social problems, and when statesmen worry about global warming in front of the glaciers. Perhaps the famous visitors to Greenland's ice could start talking more with the locals about their expectations from global warming.

Comments (3)

by Sam Vilain on July 07, 2009
Sam Vilain

Of course new Oil reserves can be developed.  Someone will have to pay for the carbon credits, though typically it is the oil consuming country that does this, not the producer.

I really don't understand commentary like this which assumes that just because there are no free rides given to industry that they cannot produce.  The price of Aluminium and Steel produced with Oil will simply rise to deal with the included Carbon credit costs.  Producers who don't have to pay for this, because they use a Carbon-free power source, will have a competitive advantage but likely just pocket it.

It seems to be a modern-day pilgrimage for those who fear global warming's impact

Gosh that statement and others in your post makes it sound like you think those people are being weak by "fearing" the impact.  It's quite like fearing the tiger in the cage you've just been dropped in - more of a healthy respect for a real and present danger than a random and irrational phobia.

by Tim Watkin on July 07, 2009
Tim Watkin

David,

Sounds like a classic example of short-term gain, long-term pain; minerals today, melt tomorrow; good for the few, bad for the rest of us... you get my drift. There's no reason why they shouldn't profit from the misery (if it isn't minmised) as they're not the cause, but neither is it a reason for them not to do all they can to cut emissions.

But the other question - about who carries the responsibility for leading the way in cutting emissions - is at the heart of what has to be decided before December. Developing countries have every right to feel bitter about the fact that much of the existing first world got rich first by lazy, destrcutive means. It's a bloody cheek for those countries who have polluted their way to wealth to turn around and tell other countries they can't do the same thing... but it's also the only thing to say. We don't have the luxury of fairness on this one. Developing countries are just going to have to deal with their bad luck... and richer countries should be willing to waive patents and pass on technological advances as they arrive.

by Claire Browning on July 07, 2009
Claire Browning

But couldn't Greenland argue – as developing economies China and India do – that it's unfair to put it at such a disadvantage in its time of growth, given that today's rich countries developed without such hurdles? Some even argue that we, the inhabitants of richer countries, should pay the likes of Greenland not to develop their oil wealth.

Not so fast. Consulting last night in Wellington on the 2020 emissions reduction target, Nick Smith included in his top three reasons for a modest New Zealand target: "3rd lowest GDP per capita amongst Annex 1 (developed) Parties".  We're quite poor, he said.

Of course new Oil reserves can be developed.  Someone will have to pay for the carbon credits, though typically it is the oil consuming country that does this, not the producer.

Smith was also challenged on our export of West Coast coal to China - for which they have no Kyoto liability, and neither do we. Stopping might be a noble gesture, he said, but would do our economy no good, and the environment no good either; China will just shop elsewhere.

If all emitters were covered post-Copenhagen, it wouldn't matter - but if not, with respect Sam, there are some assumptions built into your comment, too. Just because producers currently don't pay doesn't answer whether they should - or why, even if not economically liable, they needn't trouble themselves with the ethics. Putting a price on carbon at the point of emission is only one method of sending a price signal. Doesn't any incentive for producers to leave coal, oil, etc in the ground (or disincentive to extract) have the same market result of sending a price signal to end users by limiting supply? Like compensation as David mentions, or dual liability (on the basis that producer and consumer are equal culprits, as far as the planet is concerned), or ... ??

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