Measuring Sustainable Development. The Energy Extraction in the European Arctic Ocean

Master's Thesis 2013 170 Pages

Energy Sciences


Table of Contents

List of Annexes

List of Abbreviations

1. Introduction

2. The European Arctic
2.1 Characteristics of the European Arctic Ocean
2.2 The Example ofEnergy Extraction in the European Arctic Ocean
2.2.1 Factors Influencing Prospects for Oil and Gas Production in the Arctic
2.2.2 Oil and Gas Activities in the European Arctic Ocean

3. The Concept of Sustainable Development

4. Measuring Sustainable Development
4.1 Requirements for Sustainability Indicators
4.2 Models and Approaches in Designing Sustainability Indicators
4.2.1 European Initiatives for Sustainable Indicators
4.2.2 Other Approaches towards Sustainability Indicators Sets

5. The Core Sustainable Development Indicator Set
5.1 Environmental Dimension
5.1.1 Climate Change Greenhouse Gas Emissions Sea Ice Conditions
5.1.2 Biodiversity and Habitat Arctic Species Trend Natural Resources Marine Protection
5.2 Social Dimension
5.2.1 Human Health Life Expectancy Suicides
5.2.2 Social Inclusion - Access to Labour Market
5.3 Economic Dimension
5.3.1 Sustainable Economic Growth - Gross Domestic Product
5.3.2 Sustainable Consumption and Production Energy intensity Export Share ofEnergy production Generation ofHazardous Waste
5.3.3 Sustainable Transport Marine Transport Investment in Transport Infrastructure
5.4 Measuring Sustainable Development in the European Arctic Ocean

6. Concluding Remarks and Outlook

Annex A: Figures

Annex B: Tables

List of References

List of Annexes

Annex A: Figures

Figure 1: The Arctic Circle

Figure 2: Arctic boundaries based on the AHDR

Figure 3: Large Marine Ecosystems of the World

Figure 4: Map of the 17 Large Marine Ecosystems of the Arctic

Figure 5: The Arctic Ocean LME

Figure 6: The Barents Sea LME

Figure 7: The Norwegian Sea LME

Figure 8: Iceland Shelf LME

Figure 9: West Greenland Shelf LME

Figure 10: East Greenland Shelf LME

Figure 11: The Faroe Plateau LME

Figure 12: Petroleum potential of assessment units and provinces in the circum-Arctic

Figure 13: Arctic share of undiscovered petroleum resources

Figure 14: Major oil and gas provinces and basins around the Arctic

Figure 15: International Energy Agency best estimate for energy supply in

Figure 16: Norway’s offshore regions in the Barents Sea and the Norwegian Sea

Figure 17: Map ofRussian oil and gas provinces

Figure 18: Seismic data coverage ofWest and East Greenland

Figure 19: Icelandic areas with potential for commercial oil and gas accumulations

Figure 20: Faroe Islands licensing status

Figure 21: Bellagio Principles

Figure 22: Pressure-State-Response (PSR) framework

Figure 23: Driving Force-Pressure-State-Exposure-Effect-Action (DPSEEA) framework

Figure 24: The Eurostat sustainable development indicator pyramid

Figure 25: The construction of the European Arctic Ocean Sustainable Development Indicator Set

Figure 26: CO2 emissions from petroleum activities in Norway in

Figure 27: Sources ofNorwegian emissions of CO2 in

Figure 28: Carbon dioxide emissions (kt) in the area of the European Arctic Ocean

Figure 29: World’s carbon dioxide emissions (kt)

Figure 30: CO2 emissions (metric tons per capita) in the area of the European Arctic Ocean

Figure 31: Comparison of CO2 emissions in the European Arctic Ocean in 2003 and

Figure 32: World’s CO2 emissions (metric tons per capita)

Figure 33: CO2 emissions from international marine bunkers

Figure 34: Average sea ice extent in the Arctic in March, September and annually for to

Figure 35: Greenland’s Marine Protected Areas

Figure 36: Iceland’s Marine Protected Areas

Figure 37: Norway’s Marine Protected Areas

Figure 38: Russia’s Marine Protected Areas

Figure 39: Life expectancy Faroe Islands

Figure 40: Life expectancy Greenland

Figure 41: Life expectany Iceland

Figure 42: Life expectancy Norway

Figure 43: Life expectancy Nordland

Figure 44: Life expectancy Troms

Figure 45: Life expectancy Finnmark

Figure 46: Life expectancy Russian Federation

Figure 47: Life expectancy Murmansk Oblast

Figure 48: Life expectancy Arkhangelsk

Figure 49: Life expectancy Nenets Autonomous Okrug

Figure 50: Deaths from suicides in Greenland

Figure 51: Deaths from suicides Faroe Islands

Figure 52: Deaths from suicides in Iceland

Figure 53: Deaths from suicides in Arctic Norway

Figure 54: Labour force European part of Arctic Russia

Figure 55: Labour force Faroe Islands

Figure 56: Labour force Greenland

Figure 57: Labour force Iceland

Figure 58: Labour force Nordland

Figure 59: Labour force Troms

Figure 60: Labour force Finnmark

Figure 61: Unemployment Faroe Islands

Figure 62: Unemployment Iceland

Figure 63: UnemploymentNordland

Figure 64: Unemployment Troms

Figure 65: Unemployment Finnmark

Figure 66: UnemploymentNorway

Figure 67: Unemployment European part of Arctic Russia

Figure 68: Unemployment Russian Federation

Figure 69: GDP per capita of the countries bordered to the European Arctic Ocean

Figure 70: GDP per capita Arctic Norway (in US$)

Figure 71: Absolute GDP Arctic Norway (NOK)

Figure 72: GDP per capita Arctic Norway (NOK)

Figure 73: Absolute GDP European part of Arctic Russia (in bln. RUB)

Figure 74: GDP per capita European part of Arctic Russia (in RUB)

Figure 75: GDP per capita European part of Arctic Russia (US$)

Figure 76: Value added in Norway

Figure 77: Energy intensity of the countries bordered to the European Arctic Ocean

Figure 78: Comparison of energy intensities in 1999 and

Figure 79: Energy production by source of the countries bordered to the European Arctic Ocean

Figure 80: Production and export share of energy production in Iceland

Figure 81: Production and export share of energy production in the Russian Federation

Figure 82: Production and export share of energy production in Denmark

Figure 83: Production and export share of energy production in Norway

Figure 84: Shipping traffic in the Arctic

Figure 85: Vessels reported in the circumpolar North region

Annex B: Tables

Table 1: Summary of results of the Circum-Arctic Resource Appraisal

Table 2: Taxonomy of sustainable development goals

Table 3: Requirements for sustainability indicators

Table 4: Adapted requirements for sustainability indicators

Table 5:HI 1- Greenhouse gas emissions: meeting requirements for sustainability indicators

Table 6: Trends in sea ice extent in percentage per decade for the sub-regions of the Arctic relative to 1979-2009

Table 7:HI 2- Sea ice conditions: meeting requirements for sustainability indicators

Table 8:HI 3- Arctic species trend: meeting requirements for sustainability indicators

Table 9: Levels of common sounds in the marine environment

Table 10:HI 4- Natural resources: meeting requirements for sustainability indicators

Table 11: Greenland’s Marine Protected Areas

Table 12: Iceland’s Marine Protected Areas

Table 13: Norway’s Marine Protected Areas

Table 14: Russia’s Marine Protected Areas in the Barents Sea

Table 15:HI 5- Marine protection: meeting requirements for sustainability indicators

Table 16:HI 6- Life Expectancy: meeting requirements for sustainability indicators

Table 17:HI 7- Suicides: meeting requirements for sustainability indicators

Table 18:HI 8- Access to labour market: meeting requirements for sustainability indicators

Table 19: HI 9- Gross Domestic Product: meeting requirements for sustainability indicators

Table 20:HI 10- Energy intensity: meeting requirements for sustainability indicators

Table 21:HI 11- Export share of energy production: meeting requirements for sustainability indicators

Table 22: HI 12 - Generation ofhazardous waste: meeting requirements for sustainability indicators

Table 23: AMSA vessel categories

Table 24: HI 13- Marine transport: meeting requirements for sustainability indicators

Table 25:HI 14- Investment in transport infrastructure: meeting requirements for sustainability indicators

List of Abbreviations

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World Health Organisation

1. Introduction

The Arctic is probably the only region in the world that has as of yet been largely spared from human activities. This is primarily caused by its extreme environmental conditions (such as long cold winters, sea ice, glacial ice etc.). Nevertheless, the region hosts a unique biodiversity that is of significant social, economic and cultural importance to local com­munities.

Today, the Arctic is increasingly regarded as key region in a globalised world. This is the result of a variety of factors: firstly, territorial conflicts about the region have raised public awareness in the past. Secondly, the Arctic is especially vulnerable to the effects of global warming, as has become obvious by the melting of sea ice in recent years. Moreover, rapid environmental changes in the Arctic will have global consequences, such as rising sea lev­els of the world’s oceans. Thirdly, the world is focusing on the northern hemisphere, be­cause the region is linked to a storehouse of natural resources (Einarsson et al. 2004, p. 20­21). Therefore, the Arctic faces various challenges in the 21th century including the search for natural resources, global warming and environmental protection, as well as the emer­gence of shipping routes and the establishment of tourist centres (Berkman 2012).

It is well-known that the world’s increasing demand for energy resources goes hand in hand with the growing world population and the significant importance of emerging coun­tries such as China, Brazil and India. Furthermore, a decrease of oil production can be ob­served in major oil producing regions, whereas oil prices will increase in the long-term and the provision of energy resources will be prospectively concentrated in alternative regions. For a long time, energy extraction in the Arctic appeared non-economical, because ofharsh weather conditions and the need for high technical standards - though this might change in the near future. Changing climate in general and rising temperatures in particular result in the melting of sea ice. As a consequence, this process implies new economic opportunities for energy extraction activities in the once ice-covered Arctic Ocean. The potential for un­discovered offshore energy deposits is already recognised, but the Arctic Ocean is gaining further importance for other future energy extraction activities as well. It can be assumed that the production of energy from offshore development will continue to increase consid­erably in the future, implying that the volume of hydrocarbons transported by the Arctic Ocean will also rise. Despite the positive developments concerning energy activities, it is now questioned to what extent these offshore energy resources can be used in a sustainable way.

Based on the considerations to ensure long-term sustainable development in the Arctic Ocean, this study aims to analyse if sustainable development is generally measureable in this region. The study pursues a European perspective and focuses on the commercial ex­ploitation (oil and gas activities) of the European Arctic Ocean. As a result, the main re­search question of this master thesis is:

Is sustainable development in relation to energy extraction in the European Arctic Ocean measurable?

In order to answer this question, the study is structured as follows: in chapter 2 the ecosys­tem of the European Arctic Ocean will be characterised, additionally factors that influence offshore energy extraction activities in this area will be outlined. Moreover, the first part of the study will present offshore oil and gas activities in the examined region and highlight the potential for additional future extraction programmes.

To introduce the topic of sustainable development in chapter 3, the term ‘sustainability’ will be classified within the current scientific discourse and the concept of sustainable de­velopment will be deduced. The underlying method of this study will be a theory-based case study, presented in chapter 4 by illustrating different approaches of indicator systems in general and exemplary frameworks of sustainable development indicator sets in particu­lar. Furthermore, differences in the application of various indicators will be depicted in this chapter.

Following this, in chapter 5, the main part of this study, a set of indicators able to measure sustainable development in the European Arctic Ocean will be compiled, namely the Euro­pean Arctic Ocean Sustainable Development Indicator Set (EAO SDIS). It is therefore less matter of illustrating if the region is sustainable or not, but rather the selection of indicators will show in how far chosen key objectives of sustainable development will be achieved and contribute generally to the measuring of sustainable development in the reflected area. Thus, the set of indicators points out the impacts of oil and gas activities to the marine eco­systems, societies and economies of the European Arctic Ocean’s adjoining countries.

The main challenge thereby consists of finding appropriate indicators that will make sus­tainable development measurable in relation to economic activities in maritime waters. Although a wide range of regional, national or international sets of indicators already exist, to date only a few strategies are known that evaluate sustainable development in a mari­time environment.[1] In this regard, the set of indicators uses the example of energy extrac­tion to explain economic activities and their consequences for ecosystems and societies in the immediate area. In addition, the indicator set will provide up-to-date scientific knowl­edge, identify gaps in the records of data and create policy recommendations regarding sustainable development in the European Arctic Ocean.

In response to the main research question the following sub-issues will be clarified: what environmental, social and economic effects might energy extraction activities in the area of the European Arctic Ocean have? What is the role of local, regional and international ac­tors in ensuring sustainable development in the examined area while considering the ongo­ing process of climate change, as well as rapid economic development?

Finally, descriptive results will be illustrated. These results are subsequently evaluated in 5.4, whereas completing and concluding remarks as well as comprising policy implications are outlined in chapter 6.

2. The European Arctic

Defining the Arctic appears at first more simple than it actually is. It is noteworthy that scientific literature tends to use different approaches to find a general informative defini­tion of the Arctic. Most commonly, scientists define the Arctic as the region above the Arctic Circle, which implies a fictitious frontier above the parallel of latitude 66° 32" N (see Figure 1). The Arctic Circle denotes an area which is marked by the so-called summer solstice and the winter solstice. In addition there are six months of continuous daylight and six months of continuous darkness. On the other hand the circumpolar Arctic is also some­times restricted to the area north of the tree line, while others define the North Pole as an area based on biophysical criteria (NSIDC 2013a). Another difficulty in defining the Arctic is based on the fact that this area does not capture a union of several states but consists mainly of segments of nation states. Against this backdrop the Arctic amounts to a bloc of different geopolitical conventions in individual sectors of a region. The definition used in this study refers particularly to that of the Arctic Human Development Report (AHDR), which is due to the Arctic Monitoring and Assessment Programme of 1997 and 2002 (AMAP)[2]. The AHDR Arctic includes a geographical definition of all of Alaska, Greenland, Iceland, and the Faeroe Islands, as well as Northern Canada together with Northern Quebec and Labrador and parts of Norway, Sweden and Finland. Furthermore, this comprehension of the Arctic comprises segments of Russia, namely Murmansk Oblast, the Nenets, Yamalo-Nenets, Taimyr and Chukotka autonomus okrugs, Vorkuta City in the Komi Republic, Norilsk and Igsrka in Krasnoyarsky Kray, and those parts of the Sakha Republic which border to the Arctic Circle (see Figure 2). The region described above covers an area over 40 million square kilometers or eight percent of the surface of the Earth. Howeverjust 4 million people live there (Einarsson et al. 2004, p. 17-18).

2.1 Characteristics of the European Arctic Ocean

As mentioned in the previous chapter, the Arctic can be described as a large ocean which is surrounded by different territories. The Arctic Ocean is substantially different from other oceans of the world. Its main characteristic is an ice sheet, which covers over 47% of its surface (2008) and an average water temperature between 0 to 10 °C. The Arctic Ocean, with its adjacent seas, is surrounded by the land masses of the Eurasian and North Ameri­can continents. According to different estimates, the ocean spreads over an area between 9.5 and 14.1 million km2. The impact of climate change on the Arctic in general and the Arctic Ocean in particular is extensive: not only the reduction of pack ice and the rising water temperatures can be attributed to climate change, but also fundamental changes in the ecosystem of the Arctic Ocean, which have been observed over the last decades (for example the disruption of the entire marine food chain) (European Commission 2012). Characterising the European Arctic Ocean proves to be challenging since the area cannot be classified as a limited territory. It is rather a conglomerate composed of different Exclu­sive Economic Zones (EEZ) and exterritorial waters. Article 55 of the United Nations Convention on the Law of the Sea (UNCLOS) refers to a so called Exclusive Economic Zone, defined as “(...) an area beyond and adjacent to the territorial sea, subject to the spe­cific legal regime established in this Part, under which the rights and jurisdiction of the coastal State and the rights and freedoms of other States are governed by the relevant pro­visions of this Convention.” (UNCLOS 1982). According to that definition, such an eco­nomic zone is characterised by an area beyond the seaward boundary of the territorial sea that extents up to 200 sea miles (370.40 km). In this area, the coastal nation possesses sov­ereign rights and jurisdiction (for example the right of economic use including fishing) (UNCLOS 1982).

The approach of Large Marine Ecosystem (LME) offers another attempt to characterise the European Arctic Ocean further, it will be elucidated in detail below. This approach is based on the assumption that the oceans of the world are divided in different Large Marine Ecosystems (see Figure 3). The methodology of the LME approach is accompanied by a framework of an integrated ecosystem-based management[3] and is applied within different geographical management areas that are based on distinctive ecosystems rather than politi­cal boundaries. This procedure should facilitate the assessment of ecosystem vulnerability. The so called LMEs describe large areas of oceans based on four ecological criteria: bathymetry, hydrography, productivity, and trophic relationships (PAME 2009, p. 1). The Arctic marine environment consists of many ecosystems. Ecologically the Arctic Ocean and its adjacent seas are subjected to various conditions. Thereby the area can be catego­rised into high, low and sub-arctic zones. This refers to the distinction between areas with a permanent ice cover, a seasonal ice cover, and no ice cover at all but with cold water aris­ing from the nearby seas. Concerning productivity, the high Arctic Ocean is, in contrast to the sub-Arctic Ocean, characterised by a short growing season and marginal production. The Arctic Large Marine Ecosystems are not only distinctly different from other LMEs of the world but also between themselves. Those systems are diverse and dynamic, driven by extreme seasonality in ice and production (PAME 2011, p. 10).

The Arctic LMEs map lists 17 different LMEs in the Arctic Ocean and the surrounding seas (see Figure 4). Seven of them rank among the European Arctic Ocean: the Arctic Ocean LME, the Barents Sea LME, the Norwegian Sea LME, the Iceland Shelf LME, the West Greenland Shelf LME, the East Greenland Shelf LME, and the Faroe Plateau.

The Arctic Ocean LME is positioned centrally on the North Pole (see Figure 5) and covers over 6 million km2. The LME is noted for three ridges, the Alpha Mendeleev Ridge, the Lomonossov Ridge and the Gakkel Ridge, which divide the Arctic basin in four sub­basins. In addition, the LME lies within the range of the North Atlantic Oscillation which bears different effects on the ecosystem. The Arctic Ocean LME is characterised in par­ticular by a perennial ice cover that unrolls seasonally between 60° N and 75° N latitude. It should be stressed, that this LME in particular is influenced by climate change. The area is marked by reduced precipitation and cold temperatures, since sea ice reduces the albedo effect[4]. For example, the sea ice shrinks in thickness and extent very year. In this regard, the National Aeronautics and Space Administration (NASA) reported in 2006 that between 2005 and 2006 the winter ice maximum was around 6% smaller than the average amount in the last 26 years (Sherman and Hempel 2009, p. 455).

The Barents Sea LME is located within the Northeast of Europe including Norway and Russia (see Figure 6). The surface area of this LME amounts to 1.7 million km2. It is a relatively shallow sea with an average depth of approximately 200 meters. The Barents Sea LME is characterised as a transition zone: it converts the warmer water from the Atlantic into cooler Arctic and Polar water. Against this backdrop the climate in this area exhibits a temporal variability depending on the inflowing Atlantic water. This indicates that the ma­rine environment is susceptible to seasonal variations, for example ice cover and light re­gimes (Sherman and Hempel 2009, p. 513).

The Norwegian Sea LME is situated off the West Coast of Norway and covers a surface area over 1.12 million km2 (see Figure 7). This LME is marked by a sub-arctic climate induced by the Iceland-Faroe Ridge, which separates the relatively warm waters from the North Atlantic from the cold Arctic deep waters of the Norwegian Sea. Ecologically the LME is considered as a moderately productive ecosystem (Sherman and Hempel 2009, p. 581).

The Iceland Shelf LME surrounds Iceland in the Northeast Atlantic Ocean (see Figure 8). Like the Norwegian Sea LME, this area is characterised by a seasonal ice cover and fluc­tuations in temperature. This is due to a sub-arctic climate and environment. The LME is also recognised as a highly active geographical area, where temperature, currents, tides and seasonal oscillation affect the productivity. The Iceland Shelf LME covers an area of about 315,500 km2. Oceanographically, the diagonal ridges are of particular importance: they divide the relatively warm waters of the Atlantic from the colder Arctic waters of the Ice­land Sea (Sherman and Hempel 2009, p. 563).

Greenland’s part of the European Arctic Ocean can be divided into two areas: The West Greenland Shelf LME and the East Greenland Shelf LME. The former extends along Greenland’s west coast into the Atlantic Ocean (see Figure 9) and covers a surface area of about 375,000 km2, while the latter extends along Greenland’s east coast to the Eirik Ridge (see Figure 10) and spans an area of about 319,000 km2. Both of the LMEs are character­ised by sub-arctic climate even though there are major differences between the ecosystems between South and North. These conditions lead to seasonal variations in sea ice cover, temperatures and productivity. The LMEs are areas of low productivity as they are covered by ice for most of the year (Sherman and Hempel 2009, p. 777, 545).

The Faroe Plateau LME surrounds the Faroe Islands in the Northeast Atlantic Ocean (see Figure 11). Like the LMEs described above, this LME is characterised by sub-arctic cli­mate. In contrast to Greenland’s LMEs, the Faroe Plateau LME extends along a well- defined and uniform area which covers over 150,000 km2. The shelf of the islands is rela­tively broad. It is separated from waters of the open ocean by a persistent tidal front (Sherman and Hempel 2009, p. 535).

In the following, this classification will be used to explain commercial energy extraction in the designed areas.

2.2 The Example of Energy Extraction in the European Arctic Ocean

The following chapter will clarify to what extent the area of the European Arctic Ocean is of particular interest for projects of energy extraction. In this regard it shall be investigated, which factors are influencing oil and gas activities in the European Arctic Ocean and which of such projects are currently running and which projects can be identified in future, respectively.

For a long time the Arctic was an unspoilt region that lay outside the focus of national and international interests. This perception has changed in the last few years. The circumpolar North is gaining importance to the global system regarding to the development of its re­source base. Different global players (such as various countries, national energy compa­nies, but also scientists) are expecting new trends, opportunities, and also challenges in regards to the energy resources in the Arctic. The main reason for this development is the abundance of energy resources in the region. Deposits of oil, gas, uranium and coal can be found, although the first two commodities are particularly interesting for commercial op­erators (Funsten 2009, p. 6).

Important information concerning the deposits of oil and gas can be found in the Circum- Arctic Resource Appraisal (CARA), a report published by the U.S. Geological Survey (USGS) that evaluated the petroleum and the gas potential of all areas north of the Arctic Circle. The appraisal investigated 33 different provinces of which 25 exhibit a 10% or greater probability of at least one significant undiscovered petroleum (or gas) accumulation (Bird et al. 2008, p. 1-2.). The report states that more than 70% of the undiscovered oil reserves are estimated to occur in five provinces: Arctic Alaska, Amerasia Basin, East Greenland Rift Basins, East Barents Basins, and West Greenland-East Canada. More than 70% of the undiscovered natural gas is presumed in following provinces: the West Sibirian Basin, the East Barents Basins, and Arctic Alaska (see Table 1 and Figure 12). In total, the mean undiscovered conventional oil and gas resources in the Arctic are estimated at 90 billion barrels of oil, 1,669 trillion cubic feet of natural gas, and 44 billion barrels of natu­ral gas liquids (Bird et al. 2008, p. 4). These reserves accountjust for 12.7% of the proven petroleum reserves worldwide, therefore the Arctic will not be a substitute for major oil and gas producing countries like the OPEC Member States[5] (see Figure 13). Nevertheless, it cannot be denied that the Arctic’s importance for global energy security will increase in future.

In the report following estimations are made (that contribute substantially to the present thesis), approximately 84% of the undiscovered oil and gas in the Arctic occurs offshore (Bird et al. 2008, p. 4). The European Arctic Ocean for example includes the following offshore regions: the Barents Sea Basin, the Norwegian Sea, the Faroese Shelf, as well as East and West Greenland (see Figure 14).

In the following, factors that influence oil and gas in the Arctic, especially in the European Arctic Ocean will be covered.

2.2.1 Factors Influencing Prospects for Oil and Gas Production in the Arctic

The extraction of oil and gas in the Arctic proves to be more complex than in other proven regions and is further complicated by severe conditions. According to the International Energy Agency (IEA), the most important driver for petroleum activities in the High North is the global increase in primary energy demand of 50-60% by 2030 (see Figure 15). This is a result of the growth of the world population and a higher average standard of living in many of the developed countries. It is further estimated that oil, gas and also coal will con­tinue to be the primary energy resources in future. Therefore, the energy industry has to meet the needs for new opportunities of energy extraction to satisfy the global demand for energy while also ensuring global energy security (Holditch and Chianelli 2008, p. 317).

As previously mentioned, the Arctic region is affected by global warming and climate change. This in turn has implications for the increasing extraction of energy resources. Primarily, the reduction in sea ice promotes new opportunities for offshore oil and gas ac­tivities in the Arctic Ocean. Due to increasing open waters, it will be easier to build up pipeline constructions as well as smaller and mobile platforms that will prevent collisions with icebergs. Even if the trend towards offshore energy extraction appears initially attrac­tive it is to be kept in mind that the Arctic’s harsh weather conditions should not be under­estimated. Extreme cold temperatures, permafrost and winter darkness are challenging de­velopers on land but even worse at sea. Furthermore, offshore energy extraction requires appropriate technology which is linked to high costs. The special demands on technology associated with high investment and production costs as well as long lead times and lack­ing infrastructure for transportation have a significant influence on future oil and gas pros­pects in the Arctic Ocean (Glomsrod and Aslaksen 2006, p. 29). Related to this is the ques­tion whether Arctic petroleum resources will be profitable. To further investigate this ques­tion, petroleum companies and Arctic states refer to so-called resource economic evalua­tions. These evaluations determine if, when, where, and how exploration and development activities take place. Moreover, factors like oil and gas deposits, its volume and degree of certainty will become more important for future exploration programs (Shearer et al. 2010, p. 10). In these evaluations various cost scenarios for future oil and gas activities in the Arctic are used as far as possible. A prominent example is the FRISBEE-model[6] which examines how different petroleum prices and endowments of petroleum resource influence future investment and production in the Arctic until 2050. The model shows that costs and endowments of resource are crucial in determining how attractive a region will be for in­vestment (Lindholt and Glomsrod 2012, p. 1465). Political and socio-economic forces are other key drivers. The latter can be characterised by public acceptance and a perceived need or support from the public. This also includes the increasing interest and commitment of national oil and gas companies in the region. In contrast, political forces are concerned with the permission of the exploration activity itself and the construction of a fitting politi­cal framework. Additionally, large net-importers of petroleum (like the United States or the European Union) aim to reduce the dependency of energy suppliers (for example the OPEC Member States) (Shearer et al. 2010, p. 17).

The following chapter provides an overview of current and prospective oil and gas activi­ties in the European Arctic Ocean. It outlines the importance of energy extraction in the area.

2.2.2 Oil and Gas Activities in the European Arctic Ocean

The analysis so far has confirmed that offshore oil and gas extraction in the Arctic Ocean becomes more and more attractive to different global actors. In the following, concrete oil and gas activities in the European Arctic Ocean will be examined. It is necessary to em­phasise that oil and gas activities include several (lifecycle) phases, namely evaluation, development, construction, production, enhanced development and decommissioning. While the evaluation phase implies activities like leasing/ licensing, resource studies, pub­lic consultation or seismic studies, the development phase focuses on cost analysis, techni­cal studies and environmental field work. The construction phase is characterised by de­tailed design of facilities, production drilling and the construction of pipelines. Activities all around the production phase concern waste injection and management as well as envi­ronmental monitoring and transport. Enhanced development refers to satellite field devel­opment but also enhanced oil recovery whereas the final phase includes the decommission of projects (AMAP 2007, p. 7). In general, several phases of energy extraction take place at the same time in the European Arctic Ocean depending on the respective national condi­tions and project plans.

Two main areas of interests can be identified in the Norwegian part of the Arctic Ocean for example: the Barents Sea and the Norwegian Sea (see Figure 16) where exploration started in 1979. In both areas combined, deposits of approximately 1,268 million Sm3 of oil and 2,626 billion Sm3 of gas can be found. Leasing activities have taken place since 1975 whereby areas licensed for production have been reported especially in the Norwegian Sea since 2000. 264 production wells have been drilled in the Norwegian Sea since 1988. The Drnugen oil field was the first approved project in this area while other projects, namely the Heidrun, Njord, Norne, Asgard, Mikkel, Urd and Kristin have been following since then (Shearer et al. 2010, p. 122). In contrast to the Norwegian Sea, the Norwegian Barents Sea is considered less important compared to mature offshore areas. With nine production wells, which have been drilled since 1982, too little has yet been explored in the Barents Sea. Long distances to potential oil and gas markets as well as climatic conditions that pre­vent the unrestricted access to energy resources are the reasons for this development. Pro­jects in the Norwegian part of the Barents Sea include the Goliat field and the well-known Smhvit gas field, which represents Europe’s first export facility for liquefied natural gas and is one of the most modern offshore development fields in the Arctic. The Smhvit field is based on an under-sea construction without any surface installations. Natural gas, con­densate and natural gas liquids are transported through pipelines to the Melkeya terminal, close to Hammerfest (Shearer et al. 2010, p. 122-125).

The Russian Arctic features in total 19 prospective oil and gas provinces, of those only one belongs to the European part of the Arctic Ocean: the Timan-Pechora basin in the South Barents Sea. Although the marine shelf of the Russian Barents Sea exhibits good prospects for energy resources, the area has not been developed yet (see Figure 17) (Shearer et al. 2010, p. 141-142).

Offshore oil and gas exploration in Greenland already began in the 1970s. Since then five exploration wells were drilled but in only one hydrocarbon were found. In the period be­tween 1999 and 2002 the activities in the West and also in the East Greenland shelf were limited to seismic studies and license rounds. The priority areas for future energy extrac­tion will be located in the West Greenland Shelf (see Figure 18). Geological evaluation and exploration already have been made in this long-term strategic area. According to estima­tions, this region will also, have the greatest petroleum potential (Shearer et al. 2010, p. 101-103).

Figure 19 shows that to date no exploration wells have been drilled in the Icelandic conti­nental shelf. Prospective oil and gas activities will occur in the areas of Dreki, Gammur and Bergrisi. The potential for offshore oil and gas operation in these regions is particu­larly excellent. For the exploration in these areas it is planned to involve exploratory drill­ing from special drilling ships or floating drilling platforms (Shearer et al. 2010, p. 105­104).

Also the Faroe Islands belong to the European Arctic Ocean. The licensing activities began in 2000 and focused on the South Eastern areas in the Faroese continental shelf (see Figure 20). Later, these areas also represented the center for the drilling operations. Contrary to most expectations, just one in five exploration wells have found hydrocarbons (Shearer et al. 2010, p. 114-115).

In conclusion of this elaboration, various parts of the European Arctic Ocean are character­ised by different development phases relating to oil and gas activities. In all European countries exists the will to contribute to future energy exploration. Even if the Arctic states and their national oil and gas companies have estimated great potentials for prospective energy extraction operations, it can be observed that more seismic and licensing activities will be necessary in the future. Furthermore, oil and gas activities in the European Arctic Ocean depend on the supply of advanced technology.

3. The Concept of Sustainable Development

To elucidate the pursuit of sustainability and the related concept of sustainable develop­ment in more detail it is necessary to comprehend the origin of the so-called sustainability problem.

The issue of ‘sustainability’ already emerged within the process of industrialisation during the 19th century. Hundred years later, “The Limits to Growth”, a report from the Club of Rome (1972), was the first attempt to publicly discuss the sustainability problem in order to analyse the close connection of social production and lifestyles, economic growth and the limited availability of resources. The increase of ecological calamities promoted the growing awareness of sustainability as well (Jörissen et al. 1999, p. 11-13). The public pursuit for sustainability increased further with the knowledge that the world’s population will steadily increase and material demand will also continue to surge, while natural re­sources are broadly limited[7] and ecosystems already exhibit signs of fragility. Therefore, the problem of sustainability comprises the question how global economic growth as well as the protection of the natural environment can be ensured at the same time (Perman et al. 2003, p. 16). Perman et al. (2003) defined the sustainability problem as the question of “(...) how to alleviate poverty in ways that do not affect the natural environment such that future economic prospects suffer” (Perman et al. 2003, p. 16).

In the course of changing awareness of interlinked environmental and socio-economic as­pects (e.g. growing poverty and inequality), the issue of sustainability has also been ad­dressed by the international political arena. The collaboration of various state actors en­sued, most notably at the level of international conferences. The following conferences should be highlighted in this process: the United Nations Conference on the Human Envi­ronment in 1972 (followed by the foundation of the United Nations Environment Pro­gramme, UNEP) and the World Commission on Environment and Development (WCED). The latter was established by the UN in 1987 in order to react on growing global eco­nomic, ecological, as well as social problems (e.g. poverty, famines, debt crisis and unem­ployment). Based on the 1980 UN “World Conservation Strategy”, the key challenge of the commission was to elaborate recommendations for action to realise the idea of sustain­able development (Jörissen et al. 1999, p. 13-15). The analysis of the commission resulted in the report “Our Common Future” from 1987 (also called “Brundtland report”, after the name of the chairman, Gro Harlem Brundtland). The intent of this report was to acknowl­edge the dependency of humans on the environment and illustrate the local, regional, na­tional as well as global impacts of economic activities. With the “Brundtland report” the concept of sustainable development has been defined for the first time as “(...) develop­ment that meets the needs of the present without compromising the ability of future gen­erations to meet their own need.” (United Nations 1987, p. 27). This first attempt to define the concept of sustainable development initially achieved that it also gained public atten­tion (Hopwood et al. 2005, p. 39). This universally formulated definition, which is still valid toady, permits wide-ranged interpretation of the concept of sustainable development. Furthermore, it is obvious that consensus upon the goal of sustainable development is just attainable as long as the definition still remains that general. According to United Nation’s definition, sustainable development remains a cross-generational concept. On the one hand the importance for future generations is thereby related to aspects of constant welfare. On the other hand sustainable development understood that the total capital available to the people has to remain at a minimum throughout the generations in order to guarantee devel­opment opportunities to the future generations (Endres 2007, p. 314-315).

In addition, the general definition of sustainable development involves different sub­concepts which relate to three key dimensions: the environmental dimension, the social and the economic dimension of sustainable development. The environmental dimension defines a sustainable state as “(...) one in which resources are managed so as to maintain a sustainable yield of resource services” (Perman et al. 2003, p. 86) or as “(...) one which satisfies minimum conditions for ecosystem resilience through time” (Perman et al. 2003, p. 86). The environmental view on sustainable development states that human well-being is linked to the viability of ecosystems and distinguishes at the same time the importance to protect the ecological systems (von Hauff and Kleine 2009, p. 17-18). The social dimen­sion of sustainable development is meant to satisfy basic human needs and to ensure access to fundamental goods. The demand on social resources emanates from the pursuit of per­manent social cohesion as well as social peace (von Hauff and Kleine 2009, p. 20-21). Fi­nally, the economic dimension of sustainable development suggests different ways to de­fine a sustainable state: on the one hand it is defined as “(...) one in which utility (or con­sumption) is non-declining through time” (Perman et al. 2003, p. 86). On the other hand it can be regarded as “(...) one in which resources are managed so as to maintain production opportunities for the future” (Perman et al. 2003, p. 86) or as “(...) one in which the natu­ral capital stock is non-declining through time” (Perman et al. 2003, p. 86). Although these definitions emphasise different aspects of sustainable development, all of them understand economic sustainable development as the aim to maintain human quality of life while changing the mode of production or consumption through technological progress (von Hauff and Kleine 2009, p. 18-19).

The “Brundtland report” was substantially involved in promoting the sustainability debate and in operationalising the model of sustainable development. It also provides a fundamen­tal basis for upcoming international conferences such as the United Nations Conference on Environment and Development (UNCED) in 1992 in Rio de Janeiro. The essential docu­ments of the conference were published in the “Rio-Declaration” and the “Agenda 21”. Both papers set up the significant principles relating to environmental and development issues (e.g. poverty reduction, population policies and the right to development). An insti­tutional outcome of this conference was the founding of the Commission on Sustainable Development at UN level, which should observe, promote and evaluate the progress of sustainable development in various countries (Jörissen et al. 1999, p. 18).

The concept of sustainable development is albeit not free from criticism. The interdepen­dency of sustainability and development is often described as an oxymoron, since sustain­ability refers to aspects of stability or preservation (of ecological systems) and develop­ment in contrast is related to change, dynamic and growth (Jörissen et al. 1999, p. 23). Therefore, the present thesis aims at defining an operable term of sustainable development in order to balance its three different dimensions. In this regard, it is necessary to clearly determine what should be sustained, what should be developed, how to link the three di­mensions of sustainable development and for how long. Table 2 provides an overview of all these interconnections. The left, column depicts in three major categories what should be sustained: nature, life support and community. The right column shows the three cate­gories of what should be developed: people, economy and society (Parris and Kates 2003, p. 560). It is striking that both columns are encompassing the three dimensions of sustain­able development (the environmental, the social and the economic dimension) and illus­trating their direct connection. For instance, to what extent does the increase in wealth, production or consumption influence the ecosystem services or community values. Table 2 illustrates the fundamental conditions of the concept of sustainable development.

Within the analysis of the concept of sustainable development the question arises of how sustainable development can be measured. In answer to this question, it is necessary to discuss measuring instruments. Different methods will be presented in the following chap­ter.

4. Measuring Sustainable Development

The previous chapter illustrated that the idea of sustainable development comprises a nor­mative concept which follows a wide-ranging definition. Even with the attempt to specify this definition, by determining what should be sustained and what should be developed, it is difficult to measure sustainability. Measuring sustainable development requires suitable instruments to assess different development stages.

The following chapter outlines one proven method to measure the concept of sustainable development. In this context, the method of sustainability indicators will be presented. Chapter 4.1 will elucidate why indicators are a suitable approach for assessing sustainable development. In chapter 4.2 models and approaches for designing sustainability indicators are introduced. Based on the perspective of the present thesis, European initiatives will be presented as well as other approaches, which will be decisive for the core sustainability indicator set in chapter 5.

4.1 Requirements for Sustainability Indicators

The proven method of sustainability indicators dates back to the “Agenda 21” from the United Nations Earth Summit in 1992, which stated that: “Indicators of sustainable devel­opment need to be developed to provide solid bases for decision-making at all levels and to contribute to a self-regulating sustainability of integrated environment and development systems.” (United Nations 1992, p. 354). Generally, indicators are able to facilitate orienta­tion in a complex world, which consists of a multitude of systems that interact in various ways. In order to simplify system complexity to a manageable amount, indicators provide significant information about current and future development. Dealing with a complex system involves the application of a specific set of indicators. The most important contri­bution of indicators is the feature of a timely warning of changes in a dynamic system, which allows for prompt control and counteraction (Bossel 1999, p. 8-9). Related to the concept of sustainable development, indicators should comprise characteristics of the hu­man-environmental system that ensure its continuity and functionality into the future. This will help to explain the behaviour of such complex nonlinear systems and their sensitivity, resilience and capacity to switch between alternative steady states.[8] Furthermore, condi­tions of the indicators will influence significant policy and legal actions which equally have important social, environmental and economic consequences (Hák et al. 2007, p. 3). Indicators must fulfil certain requirements to accomplish the functions described below. An initial overview of guidelines for the choice of indicators, their design, interpretation and communication is provided by the so-called “Bellagio Principles”. These principles were compiled by an international group of researchers in Bellagio/ Italy in 1996, which aimed to discuss current methods of measuring sustainability and to promote the use of selected indicator systems. The final principles (see Figure 21) consider four aspects of assessing progress toward sustainable development: Principle 1 evinces that assessment of sustainable development is following a clear vision of sustainability and goals, which de­fine that vision. Principles 2 to 5 cover the content of any assessment (including Holistic Perspective, Essential Elements, Adequate Scope and Practical Focus), whereas Principles 6 to 8 deal with key issues of the assessment towards sustainable development (Openness, Effective Communication and Broad Participation). Finally, the Principles 9 and 10 high­light the necessity to further strengthen the process of assessment (concerning to Ongoing Assessment and Institutional Capacity) (Hardi and Zdan 1997, p. 1). These principles paved the way for the ongoing development in the assessment of sustainable development. As a result, different requirements for sustainability indicators have been established over recent years, depending on the objectives of users. Concerning the “Bellagio Principles”, Hass et al. (2002), for example, state the following criteria for indicator selection: policy relevance, simplicity, validity, availability of time-series data, good quality, affordable data, ability to aggregate information, sensitivity to small changes and reliability (Hass et al. 2002, p. 10). By contrast, Hák et al. (2007) concentrate on the following five methodo­logical dimensions to define the quality of an indicator: purpose and appropriateness in scale and accuracy, measurability, representation of the phenomenon concerned, reliability and feasibility and communicability to the target audience (Hák et al. 2007, p. 10). Coenen (2000) affirms that the quality of a sustainability indicator in general depends on its sig­nificance in respect to the sustainable development of a society or a region. Furthermore, he divides the requirements for indicator selection into four categories: scientific, func­tional, practical and user-related requirements. The first implies, for example, criteria for representativity, transparency or reliability. Functional requirements are characterised by early warning and the sensitivity to economic, environmental or social interrelations, whereas practical requirements cover criteria of data availability and the possibility of regular adjustments. The key challenge of user-related requirements is to cover user- related objectives and values. In this regard, user-related requirements aim to provide comprehensible information to policy and public or to attain political controllability. The reference target of an indicator is thereby of outstanding relevance for the assessment of sustainability. Opschoor and Reijnders (1991) are arguing that indicators should be defined in advance as “Distant-to-Target” indicators[9] to clarify the objectives of sustainable devel­opment (Coenen 2000, p. 49). According to the strategic focus of various authors, Table 3 summarises their considerations in a universal way.

At this point, it should be emphasised, that it is difficult to find an indicator which fulfils all of these ideal requirements. In addition, criteria for indicator selection, which are illus­trated in Table 3, should be understood as guidance for the development of high quality indicators.

In the following chapter conceptual frameworks for indicators will be represented to clar­ify what to measure, what to expect from measurement and what kinds of indicators will be useful to assess sustainable development.

4.2 Models and Approaches in Designing Sustainability Indicators

Due to the diversity of core values, indicator processes and sustainable development strategies different frameworks of sustainability indicators emerged. They are distin­guished between concepts of sustainability in general and the focus on different dimen­sions of sustainable development in particular. Moreover, they differ in the way the inter­linkages between these dimensions are interpreted and the indicators are selected (United Nations 2007, p. 39). It should be stressed that no single ideal framework for sustainability assessment exists. The application of a certain indicator framework depends on the use of respective indicators, which can be classified into different types: state indicators, per­formance indicators and indicators of policy effectiveness and policy response. They gen­erally reflect different phases of policy progress. State indicators, for example, are used to identify problems in the policy preparation stage, whereas performance indicators are characterised by focusing on changes in driving forces and pressures. They are generally helpful in the policy formulation progress. Policy effectiveness and policy response indica­tors further concentrate on getting wide-range acceptance of the measures taken by poli­cymakers during the policy execution phase (Hass et al. 2002, p. 10). Additionally, another two types of indicators can be added, namely the pressure indicator as well as the response indicator. While the former refers to control, pressure or a driving force and gauges a proc­ess that will influence a current state, the latter measures the required process resulting from the response of the governments (Bell and Morse 2008, 28-29).

Moreover, indicators can be distinguished by their methods of construction and level of aggregation. It is apparent that the issue of aggregation is an important feature of an indica­tor, which may also have impacts on the assessment of sustainable development. Both ap­proaches have advantages and disadvantages. A combined aggregate index is marked by a number of selected components, which are combined to a single unit. The main advantages of this approach are the reduction in complexity as well as the simplification and compre­hensibility of the outcomes. However, composite indices include losses of information and their weighting is often, to some extent, arbitrary. In contrast, a set of indicators is much more detailed and impartial. Hence, they will more often be used for the political decision­making processes. This property of sets of indicators can also be seen as a disadvantage since it lacks clarity. Sets of indicators are further used to represent partial aspects of the subject matter, wherefore they are particularly suitable for regional case studies (Suntum and Lerbs 2011,p. 48-50).

As mentioned above, setting a framework for the assessment of sustainable development requires defining assessment criteria based on the principle of sustainability. It also in­volves the specification of measurable indicators under each assessment criterion. Waheed et al. (2009) classify models and approaches in designing sustainability indicators into the following six categories: objective-based, impact-based, influence-based, process-based or stakeholder-based frameworks, material flow accounting and life cycle assessment as well as linkage-based frameworks (Waheed et al. 2009, p. 448). An objective-based framework is described as a proactive approach, which particularly aims at defining a sustainable state related to user-based objectives and values. The Strategic Environmental Assessment is an example for this kind of framework. In contrast, impact-based frameworks are reactive in nature and concentrate, as the title suggests, on the impacts of various actions on the sus­tainability of a particular system. This kind of framework assumes that various initiatives may have positive (above all in economic terms) as well as negatives effects (in social and environmental dimensions) on sustainable development. An impact-based approach is characterised by its three-dimensional perspective, which considers sustainability prob­lems. Thereby, it will facilitate multi-criteria decision-making methods for sustainability assessment. A typical example for an impact-based framework is the indicator set of the UN-Commission on Sustainable Development (UNCSD). Influence-based frameworks are determined by indicators which influence the sustainability progress of an organisation or institution, whereas process- or stakeholder-based frameworks try to involve stakeholders into the planning process and the vision-building process of sustainability. This approach focuses strongly on an user-related perspective. The material flow accounting and life cy­cle assessment framework analyses the material exchanges between an economy and the natural environment. In this regard, indicators are calculated to assess the level of resource intensity of the system and to optimise these processes. Finally, linkage-based frameworks are also used to assess sustainable development. They represent cause-effect relationships, which seek to define indicators for different sustainability dimensions. Hence, they are intended to recognise effective actions to control and prevent their impacts (Waheed et al. 2009, p. 448-451).

Within the scope of environmental indicator sets three types of linkage-based frameworks have become increasingly important: the Pressure-State-Response (PSR) Framework, the Driver-Pressure-State-Impact-Response (DPSIR) Framework and the Driving Force- Pressure-State-Exposure-Effects-Action (DPSEEA) Framework. The PSR-Model, de­signed by the Organisation for Economic Co-operation and Development (OECD), differ­entiates between pressure, state and response indicators. The approach states that human activities exert pressure on the environment (such as pollution emissions or land use change), which in turn can change the quality and the quantity of natural resources. Socie­ties respond to these changes with environmental and economic policies and intend to re­duce, prevent or mitigate pressures on the environment (see Figure 22) (OECD 2003, p. 9). Although this framework is commonly used, it must be stressed that the interactions be­tween human-beings and the environment are much more complex than described in the PSR-Model (Coenen 2000, p. 50-51). In this regard, the DPSIR-Framework offers a more flexible method to assess sustainability, due to the sophisticated indicator set, including driving force, pressure, state, exposure and effect indicators that it covers. This kind of sustainability indicator framework is used by many international organisations (e.g. the European Environmental Agency or Eurostat, the statistical office for the European Union) to structure environmental information. The advancement of DPSIR-Framework encom­passes the Driving Force-Pressure-State-Exposure-Effects-Action Framework (DPSEEA), which provides in more detail the impacts of macro driving forces and pressures on both health and the environment (see Figure 23). This approach, designed by the World Health Organisation (WHO), is widely used in the environmental health sector. The main advan­tage of this framework lies in its flexibility and applicability (Waheed et al. 2009, p. 452­454).

The following sub-chapters will take a closer look at different indicator systems. Regard­ing the European perspective of the present thesis, chapter 4.2.1 will focus on the Eurostat monitoring report (2011) whereas chapter 4.2.2 will present two other initiatives, which will influence the construction of the core sustainability indicator set in chapter 5.

4.2.1 European Initiatives for Sustainable Indicators

The European attempt to promote sustainable development goes hand in hand with the increasing awareness of the sustainability problems, which were already explained in chap­ter 3. The realisation of sustainable development has been pursued since 1997. Within the Treaty of Amsterdam[10] sustainable development became a fundamental objective of Euro­pean policies. Further steps were taken in June 2001 when European leaders launched the first sustainable development strategy at the Gothenburg Summit of the European Council. This strategy primarily focused on two key issues: to reveal current sustainability trends and problems within the European territory and to call for a new approach of policy­making which would reinforce a three-dimensional sustainability progress. The Gothen­burg declaration can be understood as the key document in the European Union policies decisions towards sustainable development. The declaration established general guidelines for policy development in four priority areas: climate change, transport, public health and natural resources. The strategy was specified at the Barcelona Summit of the European Council in 2002. This progress was accompanied also by international attempts toward sustainable development (such as the UN Millennium Development Goals agreed in 2000 or the World Summit on Sustainable Development in Johannesburg in 2002). As result, the European Council adopted an ambitious and comprehensive renewed Sustainable Devel­opment Strategy (EU SDS) in June 2006 for an enlarged European Union. The long-term strategy is to establish European sustainable communities. Those should be determined by managing and using resources efficiently, by the pursuit to link ecological and social inno­vations with economic growth and to ensure prosperity, environmental protection and so­cial cohesion (European Commission 2013a). The EU Sustainability Strategy is under­pinned by four key objectives and ten policy guiding principles, which should correspond to the underlying values of a dynamic European model of society. The key objectives in­clude environmental protection, social equity and cohesion, economic prosperity and meet­ing international responsibilities. Therefore, the following policy guiding principles were set up: promotion and protection of fundamental rights, solidarity within and between gen­erations, open and democratic society, involvement of citizens, business and social part­ners, policy coherence and governance, policy integration, usage of best available knowl­edge, precautionary principles and accountability of polluters (European Council 2006, p. 3-5). In July 2009 the European Commission updated the 2009 Review of EU SDS, which evaluates achieved progress towards sustainability and which reflects on the future sustain­able development strategy. To monitor the implementation of the SDS the European Commission was mandated in 2007 to draw up a progress report, which covers both the EU level and the member states. On the basis of the objectives and targets of the EU SDS, the Eurostat[11] sustainable development monitoring report was created as a comprehensive set of sustainable development indicators (SDIs), which will be updated every two years (Adelle and Pallemaerts 2010, p. 11). The report provides a quantitative assessment of whether the goals, set in the EU SDS, were achieved. The report further designed different indicators with the following requirements: policy relevance, efficient communication and statistical quality. The indicator set of the EU SDS is organised within a theme-oriented framework[12] and takes a four-dimensional approach including the economic, the social, the environmental and the institutional dimension. Hence, the sustainable development indica­tor set encompasses the following ten key issues: socioeconomic development, sustainable consumption and production, social inclusion, demographic changes, public health, climate change and energy, sustainable transport, natural resources, global partnership and good governance. Each of these themes is further divided into subthemes to arrange the indicator set related to the operational objectives and actions of the EU SDS. Moreover, the indica­tors set is (like the renewed EU SDS) structured into a three-level pyramid, which shows three levels of different indicators (overall objectives, operational objectives, actions) (see Figure 24). Thus, it responds to different kinds of user needs, with the headline indicators having the highest communication value. Within this monitoring report Eurostat intends to achieve the strategic goal of the EU SDS, namely that the protection of the environment will be integrated with economic growth strategies as well as linked to the provision of decent living and working conditions and equitable access to resources (European Com­mission 2011a, p. 3).

4.2.2 Other Approaches towards Sustainability Indicators Sets

In the following, other approaches towards sustainability indicators sets will be briefly presented. These indicator sets have been established over recent years and enjoy interna­tional recognition. One of them represents the indicators of sustainable development de­signed by the United Nations Commission on Sustainable Development. The UNCSD launched its first model in 1995 following the call of the “Agenda 21” (chapter 40, 1992) to develop and use sustainable development indicator sets (Adelle and Pallemaerts 2010, p. 58-59). Since then the indicator set has served as the basis for various national approaches. The third, newly revised set of CSD indicators was concluded in 2006 and contains a core set of 50 indicators, which are part of a larger set of 96 indicators of sustainable develop­ment. This indicator set refers not just to the four sustainability dimensions (social, eco­nomic, environmental and institutional) but rather reflects the multi-dimensional nature of sustainable development and highlights the importance of integrating its various dimen­sions. As result, new cross-cutting issues were introduced (such as poverty and natural hazards) (United Nations 2007, p. 9-11).

Compared with the CSD indicator set, which attempts to cover all sustainability dimen­sions and their possible interactions, the Environmental Performance Index (EPI) focuses on environmental sustainability and the current policy performance of individual nations. This approach is based on the assumption that previous efforts have been too narrow to cover the full spectrum of environmental challenges. Even if the need for environmental sustainability was recognised within the Millennium Development Goals[13] it is obvious that environmental objectives have not received the same level of attention as other goals. These gaps are caused by the difficulty to identify the most pressing environmental prob­lems, quantify the burdens imposed, measure policy progress, and assure funders in both the private and public sectors of the worth of their investments (Esty et al. 2008, p. 12-13). Within its proximity-to-target approach, the EPI includes a set of 25 environmental indica­tors which focuses on current national environmental performances. Furthermore, the ap­proach (in 2008 concluded) offers a composite index of current national environmental protection efforts. In this regard, the EPI pursues two core objectives: reducing environ­mental pressure to human health as well as protecting ecosystems and natural resources. The core objectives should help to identify for each indicator a relevant long-term public health or ecosystem sustainability goal. In addition, the EPI seeks to provide guidance for political decision-making, point out the direction of pollution and natural resource trends as well as the efficiency of current policy choices (Esty et al. 2008, p. 16-17).

5. The Core Sustainable Development Indicator Set

The need for a European Arctic Ocean sustainable development indicator set (EAQ SPISI As pointed out previously, the Arctic represents a key region not just in terms of global climate change, but also concerning the growing attractiveness for future commercial ex­ploitation. In particular the Arctic Ocean is becoming increasingly significant. As men­tioned in chapter 2.2, offshore energy extraction in general, as well oil and gas activities in particular have gained importance in the Arctic Ocean. In addition, the current oil and gas programmes as well as future projects were outlined. In this context, it is questionable, to what extent sustainable development in the Arctic Ocean can be ensured.

Related back to the research question the main aim of this thesis is the measurement of sustainable development in the European Arctic Ocean using a set of indicators, especially developed for this purpose (see Figure 25). The main challenge was therefore to design a set of indicators which was based not only on a conglomerate composed of different Ex­clusive Economic Zones and exterritorial waters, but also on various Large Marine Ecosys­tems (as explained in chapter 2.1). As described in chapters 4.2.1 and 4.2.2 there are nu­merous national and international indicator sets, but to date there is not one that could be applied to maritime waters, let alone to an area with such special climatic conditions such as the Arctic Ocean.

The underlying framework

The EAO SDIS will be organised within a linkage-based framework, in order to provide a clear and easily communicable structure, which could be relevant to political decision­making. The core sustainable development indicator set is thus based on the Pressure- State-Response Framework. As mentioned in chapter 4.2, the framework differs between pressure, state and response indicators. Therefore, it is preferable to apply this approach to the example of energy extraction in the European Arctic Ocean. According to the theoreti­cal basis, human activities (in this case oil and gas activities) exert pressure not only on the ecosystem of the European Arctic Ocean, but also have substantial impacts on human and economic development. Regarding the aim of the present thesis to evaluate in particular the measurement of sustainable development in the European Arctic Ocean, initiatives to promote sustainable development will not be explained as detailed as pressure and state aspects. As a result, responses from society (including environmental and economic poli­cies that intend to reduce, prevent or mitigate pressures on the environment) will be eluci­dated using few indicators.

Contents of the EAQ SDIS General structure

According to the concept of sustainable development acquired in Chapter 3 and the long­term goal of the EU Sustainable Development Strategy (see chapter 4.2.1), this thesis aims at reflecting the pillars of sustainable development and monitoring the progress towards the objectives assigned to them. In this regard, based on the considerations outlined in chapter 4, the following key objectives were formulated: the environmental dimension of sustainable development describes the key objective of ecosystem viability, whereas the social dimension covers the key objective of social cohesion. Finally, sustainable eco­nomic development represents the key objective of the economic dimension (see Figure 25).

The structure of the EAQ SDIS is similar to that of the Eurostat monitoring report or the Environmental Performance Index. At the beginning of each chapter it will be explained why the key objective of the chapter is important to sustainable development in general and how it is related to the other dimensions. The seven chosen themes (climate change, biodiversity and habitat, public health, social inclusion, socioeconomic development, sus­tainable consumption and production, as well as sustainable transport) represent the policy categories (see Figure 25).

To measure progress towards sustainable development in the European Arctic Qcean the set of indicators will focus on the importance of so-called headline indicators (HI). For the individual headline indicators an initial indicator definition and an explanation concerning their relevance will be given. Furthermore, indicators will be measured due to elucidating appropriate variables. The key findings will then be analysed in the indicator evaluation.

Data coverage

To provide a scientific background for the indicator evaluation, data for the variables will be collected, in particular from international organisations, national offices of statistics, as well as from regional monitoring programmes. To date, though, not all of the data required is available (e.g. in the case of a focused sub-region). Hence, some variables will only have the function of providing input for further evaluation and to show potential for further re­search.

Evaluation of indicators

The indicators used to cover policy categories and key objectives of sustainable develop­ment in the European Arctic Ocean should be evaluated with regard to the requirements developed in the Chapters 4.1 (see Table 3). Regarding the presented set of indicators, which were described in chapter 4.2.1 and 4.2.2, requirements of sustainability indicators always depend on the user’s perspective. In conjunction with the European perspective of this study, the criteria for indicator selection will extend to the requirements of the 2011 Eurostat monitoring report. Therefore, the column of requirements from user’s perspective should be completed by the criteria of policy relevance, efficient communication and sta­tistical quality (see Table 4). It will be difficult to find indicators that match all of the re­quirements. Therefore, the chosen indicators provide more of a guidance for future indica­tor selection. Moreover, indicators should cover the state of sustainable development in the European Arctic Ocean, as well as the impact on ecosystem, society and economy, which results from energy extraction activities. In this regard, indicators will help to illustrate the interlinkages of the dimensions of sustainable development.

5.1 Environmental Dimension

As stated in chapter 3, the environmental dimension of sustainable development links hu­man well-being to the viability of ecosystems. The constant protection of the ecological system is the only way to ensure this interdependence. Therefore, the key objective of the environmental dimension is defined as ecosystem viability.[14]

According to Perman et al. (2003), the concept of ecology is characterised by an ecosystem reflecting an interacting set of plant and animal populations, which is directly linked to their abiotic (non-living) environment (Perman et al. 2003, p. 25). Furthermore, the authors emphasise that the viability of an ecological system depends on two fundamental features, namely its stability and resilience. Stability is described as the inclination of a population to return to a steady state after an unbalanced period, whereas resilience refers to the incli­nation of an ecosystem to retain its functional and organisational structures after an unbal­anced period. Perman et al. (2003) furthermore stress that the resilience of an ecosystem does not necessarily imply that all of its populations have to be stable. One population may decline after a disturbance, but the ecosystem as a whole must not lose its function (Per­man et al. 2003, p. 26). Consequently, an ecological system is always characterised by its processes and dynamics. Moreover, sustainable development of an ecosystem is often linked to its biodiversity, which means the variety and variability of species in ecosystems. Biodiversity is also crucial in measuring the resilience of an ecosystem to a changing envi­ronment, like climate change. As previous mentioned, ecosystem viability has a significant impact on the human well-being, which is coupled with human health, welfare and eco­nomic growth. This highlights the close connection between the environmental dimension and the other two dimensions of sustainable development. The protection of ecosystem services is therefore an integral part of sustainable development (European Commission 2011a, p. 283). To illustrate the key objective ecosystem viability in more detail, the core policy categories climate change and biodiversity will be presented in the following.

5.1.1 Climate Change

Climate change was chosen as a first core policy category for ecosystem viability related to its potential to undermine the very basis of sustainable development. Climate change can be described as the primary global challenge of the 21th century that is also reflected in its policy relevance for the international agenda[15] since it threatens the following dimensions: economic, health and safety, food production, security, and others. Changing weather con­ditions, for example, influence the food production through increased unpredictability of precipitation. Moreover, the signs of global warming include also rising sea levels that increase the risk of catastrophic flooding (UNEP 2013). However, the question whether global warming resulted from greenhouse gases or natural decadal and multi-decadal vari­ability is discussed controversially. Consequently, it is increasingly questioned to what extent the observed global changes in the environment are influenced by natural climate processes and/ or external factors such as anthropogenic greenhouse gas forcing (Johan­nessen et al. 2004, p. 328-329).

To achieve the key objective ecosystem viability, the policy category climate change has to set the sub-target of limiting climate change and its costs and negative effects to society and the environment.[16] The developments towards an international climate regime[17] are the international response to the challenges of global warming. In response to current Arctic changes due to global warming, the Arctic Council established the Arctic Climate Impact Assessment (ACIA) in 2004. The program monitors climate variability and changes in the Arctic region and supports the policy-making processes of the Arctic states (AMAP 2013). According to these ambitions, the policy category climate change covers two headline in­dicators, namely greenhouse gas emissions and sea ice conditions, to depict pressures and states of current climate change related issues in the Arctic. Greenhouse Gas Emissions

Indicator relevance

As already mentioned, the process of climate change includes changing weather conditions as well as the progress of global warming that is observed since the beginning of industri­alisation. Among other things, global warming is caused by greenhouse gas emissions, which are characterised by gas in the atmosphere that absorbs and emits radiation within the thermal infrared range. This process is the fundamental cause of the greenhouse effect. Gases that contribute to the greenhouse effect include water vapor, carbon dioxide, meth­ane, nitrous oxide, and chlorofluorocarbons. Greenhouse gas emissions can be of natural or anthropogenic natural origin. Whereas the former are necessary to ensure human life on earth, the latter are disturbing the natural equilibrium of the atmosphere due to reinforcing the natural greenhouse effect and at the same time global warming. Especially the burning of fossil fuels for energy like coal and oil has increased the global concentration of atmos­pheric carbon dioxide (C02) (NASA 2013). In this regard, it is further questioned to what degree increasing anthropogenic carbon dioxide emissions (due to energy extraction) are influencing climate change in the Arctic in general, and in the European Arctic Ocean in particular.

Indicator definition

The indicator aims at illustrating trends in human-induced emissions. Regarding the case study of energy extraction in the European Arctic Ocean, the indicator evaluation will fo­cus on carbon dioxide emissions, which are produced during consumption of solid, liquid, and gas fuels and gas flaring (World Bank 2013a). In this regard, the indicator presents merely a share of all greenhouse gas emissions.

Indicator measuring

Especially human-induced activities appear crucial in order to illustrate the increase in car­bon dioxide emissions. As an example, it can be stated that emissions to air from the petro­leum sector in Norway result principally as flue gas (which contains for example CO2) from combustion of natural gas in turbines, flaring of natural gas and combustion of diesel (see Figure 26). Petroleum activities in Norway correspond to 29% of national CO2 emis­sions in 2010 (see Figure 27) (Hansen and Rasen 2012, p. 52).

To depict trends in human-induced emissions in the Arctic, the global concentration of atmospheric carbon dioxide (CO2) is compared to national concentrations of countries bor­dered to the European Arctic Ocean. The indicator thereby presents annual total emissions of carbon dioxide.

As illustrated by Figure 28 in the period between 1994 and 2009 Russia produced by far the highest level of CO2 emissions with 1,963,935 kt in 1994 and 1,574,386 kt in 2009. Figure 29 represents that the share of CO2 emissions of countries close to the European Arctic Ocean to total world CO2 emissions is relatively low. Whereas the share of CO2 emissions of the Faroe Islands, Greenland, Iceland and Norway is close to zero, Russia’s share of CO2 emissions was around 5,72% in 2003 and around 4,91% in 2009.

Because the national concentration of CO2 emissions measured in kilo tones depends most notably on country size differences, another measuring unit was chosen to improve the comparability of CO2 emissions in the reflected area.[18] If the CO2 emissions are measured in metric tons per capita it can be noted that the distribution of CO2 emissions differ to those measured in kilo tons. The results in Figure 30 show that the Faroe Islands produced the highest level of CO2 emissions per capita, followed by Russia, Greenland, Norway and


[1] For instance, Field et al. (2002) recognised in “Oceans 2020” the importance of the maritime environment for humans (including fishing, exploitation of energy and mineral resources, shipping or leisure activities) and world’s biodiversity. Based on the assumption that humans and their effects on the marine environment threaten the sea’s natural bounty, exercising in the same time pressure towards fragile coastal seas and rein­force increasing environmental damage, the authors intent to clarify how to use ocean info efficiently. In the same time they intend to address concern about the direction, magnitude and consequences of environmental change (Field et al. 2002, p. 1-3).

[2] Due to the high number of definitions regarding to Arctic's boundaries the AMAP assessment report of 1997 serves as a guideline about the core areas of the Arctic. The defined boundary lies between 60°N and the Arctic Circle (see Figure 2) (AMAP 1997, p. 7).

[3] Levin et al. (2009) define an Integrated Ecosystem Approach “(...) as a formal synthesis and quantitative analysis of information on relevant natural and socioeconomic factors, in relation to specific ecosystem man­agement objectives.” They refer to an incremental approach which covers management decisions based on scientific understanding and receive feedback from changing ecosystem objectives. To pursue this approach the authors identified the following five key steps: scoping, indicator development, risk analysis, manage­ment strategy evaluation, and ecosystem assessment (Levin et al. 2009, p. 23).

[4] The albedo effect provides a dynamic balance between the amount of solar radiation reflected and absorbed by Earth's surface. It plays an important role in regulating global temperature. A positive feedback effect causes in heating of water and soil and thereby in melting of snow and ice areas (NSIDC 2013b).

[5] According to current estimates, more than 80% of the world's proven oil reserves (about 1,200 Billion Bar­rels of Oil) are located in OPEC Member Countries (OPEC 2013).

[6] The FRISBEE-model calculates the supply of oil and gas from Arctic regions under alternative assump­tions: 1) the reference scenario which predicts that prices will increase up to 100 USD in 2020 and up to 115 USD in 2030 2) the high oil price scenario which assumes that prices will increase up to 140 USD in 2030 and 3) the low resource scenario which supposes that undiscovered resources are 50 % below the USGS in 2008 (Lindholdt and Glumsrod 2011,p. 5).

[7] Perman et al. (2003) indicated that natural resources have different characteristics: they exist as a stock or a flow. This feature determines how far the level of current use affects future availability. In the case of flow resources (e.g. solar radiation, wind and wave power), there is no positive correlation between current use and future availability. This is different to the case of stock resources in which one should differ between renewable resources (biotic population like flora and fauna) and non-renewable resources (e.g. minerals, including fossil fuels). In the context of sustainability, non-renewable resources are gaining in importance because there is no possibility of natural reproduction or recycling process. Moreover, they are linked with industrial economics in general and with a number of waste emissions in particular. The different character of resources shows the complex interdependencies between economic activities and the environment (Perman et al. 2003, p. 18).

[8] McCool and Stankey (2004) identified also three roles of indicators in the assessment of sustainability. First, they help to depict the existing conditions of a system. Second, they facilitate evaluating the perform­ance of various management actions and policies implemented to achieve sustainability. Third, they alert users to change the social, cultural, economic and environmental system (McCool and Stankey 2004, p. 295).

[9] See also Opschoor, H., Reijnders, L. (1991): Towards sustainable development indicators, in: Kuik, O., Verbruggen, H.: In Search of Indicators of Sustainable Development. Kluwer Academic Publishers, Dordrecht, p. 9.

[10] Article 1 (2) constituted that the Treaty of the European Union shall be “(...) determined to promote eco­nomic and social progress for their peoples, taking into account the principle of sustainable development and within the context of the accomplishment of the internal market and of reinforced cohesion and environ­mental protection, and to implement policies ensuring that advances in economic integration are accompa­nied by parallel progress in other fields.” (European Commission 1997, p. 4).

[11] Eurostat is the statistical office of the European Union and aims to provide the European Union with statis­tics at European level that enable comparisons between countries and regions (European Commission 2013b).

[12] An issue- or theme-based framework covers a set of indicators which are grouped into various different issues. They are widely used concerning to their ability to link indicators to policy processes and targets. As a result, they provide a clear and direct message to decision-makers (United Nations 2007, p. 40).

[13] Goal 7 of the Millennium Development Goals implies the call for environmental sustainability. To achieve this goal the framework covers four other sub-targets: A) Integrate the principles of sustainable development into country policies and programmes and reverse the loss of environmental resources B) Reduce biodiversi­ty loss, achieving, by 2010, a significant reduction in the rate of loss C) Halve, by 2015, the proportion of the population without sustainable access to safe drinking water and basic sanitation D) Achieve, by 2020, a significant improvement in the lives of at least 100 million slum dwellers (United Nations 2013).

[14] The formulation of the key objective partly follows the EU guiding principles of sustainable development (2006), which defines its first strategic goal of environmental protection as: “Safeguard the earth’s capacity to support life in all its diversity, respect the limits of the planet’s natural resources a and ensure a high level of protection and improvement of the quality of the environment. Prevent and reduce environmental pollution and promote sustainable production and consumption to break the link between economic growth and envi­ronmental degradation.“ (European Council 2006, p. 3). But also the 2008 Environmental Performance Index has chosen the key objectives of environmental health and environmental vitality to cover the environmental dimension of sustainable development (Esty et al. 2008, p. 19).

[15] Since the United Nations Framework Convention on Climate Change (UNFCCC) in 1992, the international community aims to prevent anthropogenic (human-induced) disturbances of the climate system. Within the commencement of the Kyoto Protocol in 2005, legally binding targets were adopted to further reduce global greenhouse gas emissions. To date, the Kyoto Protocol exhibits the only rule-based instrument related to the international climate policy. Within the first commitment period (2008-2012) the treaty requires the reduc­tion of greenhouse gas emissions by 5.2%, compared to the level of 1990. The international co-operation in climate policy was continued due to annual conferences (Conference of the Parties, COP) of the 193 contract parties (including the EU Member States), whereby the extension of the Kyoto Protocol till 2020 was passed in 2012 in Qatar (BMU 2012).

[16] The sub-target is based on one of the key challenges of the 2006 EU Sustainability Strategy (European Council 2006, p. 7).

[17] The term of climate regime refers to social and cultural circumstances, which facilitate the politicisation of world’s climate and which are in turn resulting in the transnationalisation of climate policy. The long-term transnationalisation of climate policy is thereby following by the institutionalization of a so-called climate regime (Viehöfer 2011,p. 671-672).

[18] At this point it should be noted that questions of distribution would be further interesting to measure. In this regard, CO2 emissions could be examined, for example, by industry sectors.


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Dresden Technical University – Department of Economic Policy and Economic Research
measuring sustainable development energy extraction european arctic ocean



Title: Measuring Sustainable Development. The Energy Extraction in the European Arctic Ocean