Infrastructure

Overview

From housing to facilities (e.g. energy grids, sewage systems, mobile communication networks, etc.) to structures required for the operation of entire economic sectors (e.g. railroads and factories), infrastructure sustains many aspects of human activity. It is also essential for human engagement in the developing Arctic, a region with fragile ecosystems and severe climatic conditions that make installing and maintaining infrastructure a challenge in itself.

From the need for cold-resistant materials to transporting building materials across long distances between remote communities, building infrastructure in the Arctic is no easy task. For this reason, the Arctic region has one of the lowest concentrations of manmade structures in the world. The total area of manmade infrastructure built in the Arctic region in 2016-2020 amounted only to 1,243 square kilometres.

Installing infrastructure in the Arctic is also very costly – according to 2009 data from Statistics Canada, transport and communication are respectively 36 percent and 160 percent more expensive in the Northwest Territories and Nunavut than they are in Canada overall.

Investments

As traditional investors are less inclined to participate in expensive, high-risk projects, the burden of construction in the Arctic often falls on the shoulders of federal governments. Sometimes, companies develop infrastructure in the Arctic through corporate social responsibility-related initiatives to compensate for insufficient government investment.

Nevertheless, as global warming increases the accessibility of the Arctic region, states with an economic interest in the region’s development are increasingly investing in transport, communication, research, and other infrastructure through vast development projects. Such projects create jobs, stimulate local economies, and strengthen communities by improving amenities and facilities and local opportunities.

A 2016 inventory by the global financial firm Guggenheim listed 900 Arctic infrastructure projects (amongst them planned, in-progress, completed, and cancelled projects) worth an estimated one trillion dollars over the 15 years following the inventory’s compilation, with at least another $250 billion expected. In Russia alone, $300 billion’s worth of infrastructure projects have either recently been developed, are in development, or have been proposed, with another $82 billion in investment expected over the coming five years.

In 2021, the United States Congress passed the Infrastructure Investment and Jobs Act (IIJA), under which Alaska is expected to receive $3.4 million to fix highways and improve traffic and safety, as well as another $225 million to replace and repair bridges, with the opportunity to compete for additional $12.5 million from the Bridge Investment Program and almost $16 billion in national funding for projects that offer economic benefits for local communities. The Port of Anchorage will be eligible for $2.25 billion in grants over the coming five years, while Alaskan airports are expected to receive $390 million in funding.