Like most globe-trotting jaunts, Betchart Expeditions’ Warming Island tour was designed to appeal to potential customers’ desire to see new places: “Join us on this wonderful adventure of discovery!” But Warming Island isn’t just new in the generic unfamiliar-territory sense. It actually is new — younger than Beanie Babies, Miley Cyrus and George W. Bush’s presidency. Following decades of climbing temperatures in the Arctic, Warming Island calved off the east coast of Greenland three years ago, like an ice chunk crumbling from a melting snow pile.
Going to Warming Island is your best chance to see the effects of global warming up close and personal, says explorer Dennis Schmitt, who discovered the island on an ocean voyage in 2005. “Satellite images show that in 2002, this island wasn’t there, and in the year 2005, it broke away,” says Schmitt, who serves as a guide on board one of Betchart’s vessels. “On this trip, you can sail right through the area and see what is left of the ice shelf. You can see a geological event that just happened.” The voyages are also designed to raise awareness of climate change, though Schmitt hastens to add, “We don’t have a doctrinaire view where we’re trying to sell people on global warming. There’s nothing politically correct about this.”
To hear Al Gore and the Union of Concerned Scientists talk, global warming is one of the worst catastrophes ever to befall humankind. But for Betchart and a growing number of other companies worldwide, climate change is more of a mixed bag. It may be bad for the planet, but it’s giving rise to windfalls unimaginable during cooler times. Tourist jaunts to Warming Island are just the tip of the iceberg (literally!), as the Arctic thaw has attracted a vast range of profit seekers, including real-estate investors, shipping firms and oil magnates.
Take Pat Broe, a businessman from Denver, who bought the Canadian Hudson Bay port of the town of Churchill for $7 in 1997, back when it was nothing more than a chunk of tundra suspended in ice. Over the past decade, Broe has seen his investment appreciate in ways less cynical observers never dreamed it would. As the northern Canadian ice pack diminishes, a shortcut shipping lane that was once purely hypothetical — the overseas passage from Churchill to Murmansk in Siberia — inches closer to becoming one of the most important trade routes on the planet. Right now, the route is only in business from July until October. But if current warming trends continue, it should soon be open for most of the year. Canadian officials estimate the increased shipping traffic will net Churchill upward of $100 million a year, and Broe — the first to see economic potential where once there was only permafrost — will be the prime beneficiary. (The media-shy Broe did not respond to a request for comment.)
Three thousand miles away, in the northern Norwegian town of Hammerfest, hundreds of would-be oil tycoons are waiting for the ice to turn to slush so they can send their drill bits underground. The Arctic area they hope to tap is estimated to contain 25 percent of the world’s oil and gas reserves — a quantity that, at today’s prices, would be worth over $2 trillion. In preparation for the coming black-gold bonanza, according to TheSmartSet.com reporter Sara Blask, Hammerfest has undergone an overnight transformation. The main street now boasts a yoga boutique, a hot-tub purveyor and a natural-foods store. The top two floors of the Nissen Hammerfest Center, a mammoth new shopping plaza, swarm with so much activity that the area has been dubbed “Mini Wall Street.” There are at least 10 salons to choose from — approximately one for every 1,000 residents. Hotels can run upward of $300 a night. “Nobody disputes that the last reserves of oil, gas and fisheries are up here,” the town’s environmental advisor, Tom Eirik Ness, told Blask when she visited last year. “This will be a very hot area in the future.”
All of this frenzied activity — the sold-out Warming Island cruises, the behemoth building projects, the yuppification of the tundra — seems encouraging from a purely financial standpoint, particularly against the backdrop of a flat-lining global economy. But global warming opportunists have a big P.R. problem. Like the planners who created the Love Canal community, they can give the impression of building on something rotten. One particularly flagrant example: Last year, investment bank UBS launched a Global Warming Index. Investors can buy exposure to the index just as they might to a more traditional index, like the Dow Jones — an act tantamount to placing a bet that global warming is going to happen. If warming happens, the investors accrue income; if global temperatures fall, their bet flops and they lose money. “There’s something sick about this whole process — the idea that we can profit from impending doom,” says Mark Lynas, author of “Six Degrees: Our Future on a Hotter Planet.”
The possible perils of global warming commerce go beyond the idea that it’s unseemly. There’s no getting around the fact, for instance, that each of Betchart’s Warming Island voyages pumps thousands of pounds of carbon dioxide into the atmosphere, exacerbating climate change even as guides warn passengers about it. In general, a warming world is likely to be more sensitive to the environmental damage that will accompany increased tourism and economic activity in the Arctic, according to Bob Willard, author of “The Sustainability Advantage.”
“As you get increased traffic in the Arctic, the risk of a severe accident happening is higher,” Willard says. “Because of the cold temperature, the longevity of the impact will be increased — bunker fuel oil is very thick, and when it’s cold, it gets thicker. When the Exxon Valdez hit the fan, that cost billions of dollars, and the damage is still very evident. These companies all swear on a stack of Bibles that they’re going to take every precaution. But things happen.”
The prospectors themselves, of course, see things differently. If global warming is going to happen anyway, what harm is there in finding — and exploiting — the silver lining? Under a free-market system, somebody’s going to rush in and fill the profit niches that materialize as a result of climate change; assuming otherwise is like expecting teenagers to toe the abstinence-only line. What’s more, they say, while creating global-warming-fueled profit engines might seem callous, it can be a practical way of helping the planet’s inhabitants adapt to a new climatic reality.
“Trips like this increase environmental awareness,” says Sharon Giese, who took Betchart’s Warming Island voyage last year. “It isn’t just preaching to the converted — it keeps people aware that problems exist and that scientists aren’t just blowing smoke about the problem.” Ilija Murisic, executive director of hybrid derivatives trading at UBS, thinks his Global Warming Index will help inoculate businesses against the worst effects of climate change. “Let’s say you’re an airline company that goes from Alaska to the Caribbean,” he says. “Global warming could change the pattern of the seasons so that every time you’re planning to serve tourists, they won’t travel, and you have all this capacity that goes unused. By investing in this index, you can protect yourself from those kinds of losses.”
What often gets lost in the back-and-forth between global warming opportunists and environmentalists is that the differences between the two groups aren’t always as clear-cut as they seem. The continuum from climate change profiteering to green technology’s Holy Grail — shoring up the planet and turning a profit at the same time — can be an exceedingly gradual one. “There’s profiteering from climate change, and then there’s profiting,” says Tim Juliani, a business strategy fellow at the Pew Center on Global Climate Change. “Profiting from climate solutions like cleaner coal is certainly something we have to see more of. If companies don’t profit from climate change in ways like this, we’re not going to see the kinds of changes on the planet that we need.”
As environmental economists often report, profiting from the threat of global warming by developing alternative energy sources could boost the world economy in a big way. And as energy expert and Salon contributor Joseph Romm points out, those technologies, properly employed, could reduce carbon emissions and arrest catastrophic global warming in the coming decades. So the essential question to ask in separating bona fides from profiteers isn’t whether a business model seems savory but whether it supplies some tangible, overriding benefit beyond lining its proponents’ pockets. A venture needn’t actively halt or stamp out CO2 production to be beneficial. “If you step way back, there are really two important efforts under way,” Willard says. “One is to mitigate the threat of climate change, and the other is to adapt to it. We want to keep the focus on prevention, but the fact is that we need both mitigation and adaptation efforts.”
While Schmitt stresses the benefits of the Warming Island voyage — “The clients like being part of a voyage that isn’t just tourism, but also research” — he senses it’s important to tread carefully, and not just because the glaciers are slippery. “I don’t think we’ll do this voyage continually,” he says, adding that he hasn’t made a dime from his participation. “It’s fine for this year, but too many of them could veer in the direction of being hypocritical.” (Incidentally, plans for a 2009 Warming Island voyage are being put on hold until Betchart can find a boat with good underwater sonar. Arctic captains say venturing through uncharted waters without doing depth measurements could be dangerous.)
Still, when Schmitt thinks about the big things to come as the Arctic ice pack continues to dissipate, the possibilities warm the cockles of his explorer’s heart. “You can’t sail to the upper east coast of Greenland right now, but there are several places there that are going to emerge in the next decade. There are things that look like islands in the ice.” Like the would-be magnates biding their time in places like Churchill and Hammerfest, Betchart Expeditions will have to wait to see how many opportunities now mired in the deep freeze emerge right on schedule.