Does Government Support to Upstream Oil & Gas Activities Benefit Arctic Communities?

Stewart Wheeler, Canada’s Ambassador to IcelandMary Simon, Inuit Tapiriit Kanatami (ITK), CanadaMikael Anzén, Sustainable Development Working Group of the Arctic CouncilPauline Gerrard, Hudson Bay Inland Sea Initiative, IISD, CanadaMikhail Babenko, PhD, WWF Global Arctic Programme, Russia Hjalti Jóhannesson, University of Akureyri Research Centre, Iceland

Moderated by Ivetta Gerasimchuk, PhD, IISD

• direct spending on transport & monitoring infrastructure, oil spill preparedness and response

• research and development grants• preferential loans• tax breaks (reduced rates of taxes, tax credits & holidays,

accelerated depreciation allowances and other)• royalty relief • caps on liabilities• many more – see at

http://www.iisd.org/gsi/fossil-fuel-subsidies/fossil-fuels-what-cost

Examples of government support to upstream oil & gas industry in the Arctic

Hudson Bay Inland Sea Initiative

IISD-GSI estimates of the value of government subsidies to upstream oil & gas activities in Norway, Canada and Russia. Subsidy value estimates are not directly comparable across

countries, since there is no international taxation benchmark.

Country

Scope Subsidies

Identified

Value of Subsidie

s

Data year

Upstream oil & gas

9 >$4 billion

2009

Upstream oil activities,

federal + 3 provinces

63 $2.8 billion

2008

Upstream oil & gas, Federal

>20 >$14 billion

2010

How would you spend 1 million dollars to best benefit local communities in the Arctic?Richness: support infrastructure development of extractive industries, including transport infrastructure; stimulate exploration in the Arctic; introduce tax breaks and royalty relief for extractive industry companies

Responsibility: support education, healthcare and housing in the High North; develop frameworks for more transparent investment contracts with extractive companies; stimulate coordination and transparency of policies at local, regional, national and international level to avoid duplication of efforts and legal uncertainties

Resilience: invest in oil spill preparedness and other safeguards; protect ecosystem services and natural habitats

One million can be split to support several measures.