2012 Research Project"Arctic Governance and Japan's Diplomatic Strategy"
Executive Summary
Access to the Arctic has long been inhibited due to its severe weather conditions but now, as
global warming is causing its ice to melt and diminish, the Arctic Ocean is starting to enter thespotlight as a new marine frontier.

While the use of new navigation routes and the developmentof resources in the Arctic hold the promise of making great contributions to the global economy,
the progress of global warming is beginning to have serious impacts on the environment and theecosystem of the Arctic.

These changes are expected to not only force a transformation of theregional framework of the Arctic Circle, which has thus far dealt only with non-political domains,such as the protection of the environment and indigenous peoples, but also affect broader
international relations because new actors are coming into the picture: non-Arctic nations in Europe,
Asia and other parts of the world that are interested in the region.

The legal situation involving

the Arctic Ocean has to date remained up in the air but, with the melting of its ice, there is now aneed to clarify the relationships of rights and obligations among nations.

As long as the legal

situation involving the Arctic Ocean remains pending, no clear order can be maintained, thus
possibly giving rise to the "tragedy of the commons," which would cause the environment to befurther deteriorated and resources to be depleted.
If the emergence of a new frontier called the Arctic Ocean is indeed bringing about substantialchanges to international politics and the international economy, Japan will also come under theirinfluence. Focused on such awareness of the issue, year-long research was conducted under thisProject to deliberate on: what national interests Japan should safeguard in connection with a "newfrontier" in the form of the Arctic Ocean; by what means and in what areas such national interests
should be safeguarded and, further; how Arctic governance necessary for ensuring common
international interests should evolve.

This led to a set of policy recommendations being produced

and put together.
1. Economic benefits (marine transportation and resource development) and the environment
The seagoing vessel traffic volume is on the rise in the Arctic Ocean.

According to the transit

records of seagoing carriers on the Northern Sea Route (Northeast Passage) along the Russian

coasts that is open to commercial vessels, the number of ships that navigated the route was three in2010 and 34 in 2011.

Meanwhile, Russia has, on the strength of Article 234 of the United Nations

Convention on the Law of the Sea, created a range of regulations to ensure the safety of ships
navigating alongside the Russian coasts (approval on the hull of the vessel, a pre-navigational
declaration, an icebreaker escort service and a pilot guiding service, which are required fortransiting ships), which, in the light of marine transportation, poses a concern about the legal
legitimacy and the transparency of pricing involved.

The use of the Northern Sea Route will also

necessitate the development of harbor facilities that can serve as a port of call for large vessels totake refuge at in times of emergency, as well as steps to apply in the event of a large oil spill
emergency at sea.

The possibility of Japan supplying satellite information to voyaging ships on aconstant basis as a means to assist in operations of drift ice monitoring and navigation routeselection should also be probed.
In the light of cost efficiency with respect to the Northern Sea Route, the use of an unstableshipping route would not be suitable for transportation of highly advanced industrial products,
materials, components and intermediate parts as they are placed under a high level of marketing
control or production control.

Another point is that a ship cannot run at full speed there because itis escorted by an icebreaker in ice-bound waters.

Considering the environment of the Arctic

Ocean, diesel oil, which is pricier than fuel oil, would have to be used for voyages on the northernroute.

Accordingly, for the time being, the route via the Suez Canal is more economical in thecase of a container vessel or car carrier.
Resource transportation via the Northern Sea Route started in 2010, which, at the onset, involved
shipments of condensate from Russia to China; then in 2012, an LNG tanker traveled the Northern
Sea Route to reach the City of Kitakyushu, marking the first-ever such shipment.

Using theNorthern Sea Route may possibly lead to lower LNG prices. In order to promote Japan's importsof LNG from the Arctic Circle in non-winter seasons, the utilization of government support
programs needs to be boosted especially in an attempt to acquire interests in gas field and LNG
projects.
While Russia, Norway, the US and Greenland, among others, have already attracted investmentsfrom abroad to embark on resource development in the Arctic, the fact is that weather conditions,which remain severe as ever, keep the costs high and no technological solution to crude oilleakages in ice-bound seas has been established yet.

While resource development carries

objectives of pursuing profits as a commercial project and of contributing to energy security byacquiring interests, it, even more importantly, serves as a venue for the formation of a regional
order cultivated by constant capital and infrastructure investment and mutually beneficial sharingof profits.

Participation by many countries in resource development in the Arctic should be given

a position as a process that generates value – "order formation" – and not as a "resource plunder."There are three environmental issues in the Arctic Circle: reduction in sea ice in the Arctic waters,
the melting of the Greenland Ice Sheet and methane emissions as a result of permafrost melting.
The effects of these problems include rising sea levels (caused by the melting of the Greenland IceSheet), the effect of thermohaline circulation, a loss of biodiversity (the danger of extinction of thepolar bear, etc.) and extreme climate phenomena, while the accelerated warming of the entire globe
is the most serious. In the meantime, climate change in the Arctic region is progressing rapidly
and sea ice is diminishing more quickly than any model computation indicates it to be.

Whileinternational efforts to combat global warming are being thwarted by conflicting state interests,
further work is awaited on deterring warming itself.
2. Implications on security and on international relations in East Asia
New sea lanes that connect the Atlantic Ocean and the Pacific Ocean by the shortest distance
imply not only impacts on the economic sphere but also a significant transformation of strategic
maneuver deployment capabilities of those nations which are concerned with global security issues.
This prospect requires examining a possibility of reduced credibility of the US's extended nuclear
deterrence capabilities, as well as various security issues in waters adjacent to the Arctic, including
the seas surrounding Japan.

Japan needs to deliberate, from a long-term perspective, reviewing

Japan's defense posture, reviewing Japan-US cooperation and advancing joint efforts with friendly
nations in the area of security, which it should do through the work of revising the National
Defense Program Guidelines and the Japan-US Defense Cooperation Guidelines.
The geopolitical changes in the Arctic will present significant opportunities, and challenges, forNortheast Asia, particularly Japan, Korea, China, Russia and the US.

Already, Korea and China

have been actively and deliberately powering ahead with their involvement in the Arctic, working
on scientific observation as well as on navigation route development and energy development andalso pushing forward with their summit diplomacy.

Russia, moving beyond the Arctic Circle, hasbeen working to reorganize its Pacific Fleet and making an attempt to strengthen its militarypresence in the Northern Territories and the Okhotsk Sea in their vicinity.

The US has alsoestablished a comprehensive policy on the Arctic, with its Navy also deepening its
involvement by, for example, creating a roadmap. In contrast, Japan is falling behind in its
action to address Arctic issues.

It is faced with a pressing need to first set up a dedicatedheadquarters so as to develop a national policy, advance scientific observation and navigation routeand energy development and, with security issues in mind, explore cooperation with nations
concerned.
3. Governance
The first step needed to ensure better governance in the Arctic is to objectively examine fromnumerous angles the possibilities and limitations of existing frameworks.

The issues to becovered in that attempt include the legitimacy of the existing frameworks and a balance between
environmental/ecosystem protection and the advancement of economic benefits.
security issues not handled by the Arctic Council must be addressed as well.

Furthermore,

What Japan should

do is to deepen its commitment by obtaining permanent observer status at the Arctic Council andcontributing to the creation of a new framework.

It should also adopt policies that give its

diplomacy a greater presence and provide greater support for activities by the private sector. Inparticular, Japan's further involvement can be expected to take shape in its contributions andinternational cooperation in scientific surveys/research and environmental protection, areas inwhich it is especially proficient.

Economic/commercial benefits and returns will be strategically

positioned in the course of this development.