Due to climate change the ice-belt is melting. It will change the environment and open up for a new route for sea trade. The Arctic is a very fragile environment and I discuss the possibility to use a counterbalance fee based on the expected increased cargo ships that will enter and pass the Arctic Ocean. The fee will be used for measures to preservation of the environment and to implement clean tech in ports and at those cargo ships that frequently will use this route.

1. Jan Softa @ Somerco 2014-12-19
Enhance the EU member states competitiveness
Part 30 – Arctic route (counterbalance)
Abstract
Due to climate change the ice-belt is melting. It will change the environment and open up for a new route for sea
trade. The Arctic is a very fragile environment and I discuss the possibility to use a counterbalance fee based on
the expected increased cargo ships that will enter and pass the Arctic Ocean. The fee will be used for measures
to preservation of the environment and to implement clean tech in ports and at those cargo ships that frequently
will use this route.
Background
Helping geniuses! Our slogan sums up whom Somerco aims to help. Somerco are a company
that target to help governmental and business professionals together with researchers and
innovators so that these geniuses can create prosperity and jobs in society. In this paper, I will
discuss if increased sea trade in the Arctic can use fees to counterbalance for the
environmental impact it will have on the Arctic.
Introduction
Sea trade is the first man began to use when they wanted to conduct trade over large
distances. New transport vehicles as trucks and trains and also faster as planes has arrived,
but still it is sea trade that carries the largest bulk of cargo around the globe. It has many
advantages to other means of transport. Besides ports and a few canals, there is no need to
build infrastructure as roads in order to make it work and it is cheaper to use than transport by
plane. It can also carry far more tonnes at a time than any other transport means.
In cargo transport, time is money because it saves cost for wages, fuel consumption and so
on. It is a strong incentive for exploiting new sea routes. The Arctic route enables cargo to
arrive rapidly to its destination in order to decrease costs, keep the cargo fresh (fruits) and so
on. We also find that man built canals as the Suez Canal and the Panama Canal. These canals
use transit fees in order for cargo ships to pass.1
So to use a fee for counterbalancing
measures for the environmental impact an increased sea fare will have in a fragile
environment as the Arctic could be accepted.
For those cargo ships that start in the northern part of the globe and have a destination in
other northern part of the globe the Arctic route will become an increasingly interesting
alternative.
Some statistics
With a reduction of 40% in ice the last 30 years, the Northern Sea Route (NSR) is becoming
an increasingly attractive option for ship-owners, with a route 40% shorter than the Suez
Canal and 60% shorter than the Cape of Good Hope. The NSR promises major decreases in
fuel consumption and emissions, as well as the requirement for piracy countermeasures.23
1
Suez Canal Authority - Toll Calculator. http://www.suezcanal.gov.eg/calc.aspx ; Suez Canal to increase transit
fees. http://www.marsecreview.com/2013/02/suez-canal-authority-to-increase-transit-fees ; Panama transit canal
cost calculator http://www.agenco.com/html/TransitCostCalculator.aspx ; Toll assessment.
http://www.pancanal.com/eng/op/tolls.html
2
Is Arctic shipping Russia’s answer to the Suez Canal? http://www.seatrade-global.com/news/asia/is-arctic-
shipping-russias-answer-to-the-suez-canal.html

2. Jan Softa @ Somerco
China has referred the Northern Sea Route as the “Arctic Golden Waterway”. Michael Byers,
a Canadian scholar in one of his recent article written for Al Zazeera has referred Professor
Bin Yang of Shanghai Maritime University who has estimated that the Northern Sea Route
alone could save China a staggering $60 to $120 billion annually.4
Fragile
A sign of what to come was when the Danish freighter Nordic Bulk shipped a load of iron ore
from Norway to China via the Northern Sea Route, which runs through Russian territory, in
2010. The Nordic Orion's sister ship, the Nordic Odyssey, 2012 took on 65,000 tons of iron
ore from Murmansk, in northern Russia, destined for China, according to the New Yorker.5
It is likely that a lot more ships will take the route over the Arctic due to climate change.
“For some routes, it [the Northwest Passage] can save up to 7,000 kilometres – and that’s not just a distance
savings, that’s a savings in terms of fuel, time and salaries,” Michael Byers, an international law expert
at the University of British Columbia, told the Globe.
“Time is money in the international shipping business and a 7,000-kilometre shortcut is of great interest.”6
The Arctic thou is a very fragile environment. There are concerns with the preservation of
species and the fauna. Due to this fragility, perhaps there should be a counterbalance fee for
cargo ships entering the Arctic Ocean. The fee is to build up and have funds for taking
measures to protect and improve the environment in the Arctic Ocean.
When to pay the fee
All ships that transport cargo in the Arctic Ocean should pay a counterbalance fee. The ships
that take this route pay in advance to pass a certain latitude when it enters the Arctic Ocean. It
is a simple online transaction to the Arctic Council that receives the payment. At the same
time, the software used for these payments should also alert to those countries authorities
what ship it is, cargo weight and what type of cargo.
Incentive to pay
All ships have to dock at a port with its cargo so it should not be very difficult to make those
entering the Arctic agree to pay a counterbalance fee. Also the different coast guards could
monitor that all ships that enter the Arctic has paid.
How the fees work
The way the fees are set up can be done in different ways. It could copy the way the canal in
Suez or Panama charge those who want to use their canals. See links:
Panama transit canal cost calculator http://www.agenco.com/html/TransitCostCalculator.aspx
4
Geo-Politics Of Global Warming And Emergence Of A New Geo-Strategic Center In The Arctic – Analysis.
http://www.eurasiareview.com/16072013-geo-politics-of-global-warming-and-emergence-of-a-new-geo-
strategic-center-in-the-arctic-analysis/
5
Danish freighter traversing Northwest Passage a sign of things to come – is Canada ready?
https://ca.news.yahoo.com/blogs/dailybrew/danish-freighter-traversing-northwest-passage-sign-things-come-
221210126.html
6
Danish freighter traversing Northwest Passage a sign of things to come – is Canada ready?
https://ca.news.yahoo.com/blogs/dailybrew/danish-freighter-traversing-northwest-passage-sign-things-come-
221210126.html

3. Jan Softa @ Somerco 2014-12-19
Suez Canal Authority - Toll Calculator. http://www.suezcanal.gov.eg/calc.aspx
The reason for the charge fee to pass these will be a bit different than the one for entering the
Arctic Ocean. To build these canals demanded much hard labour and money. This massive
investment needs to be repaid. Moreover, these canals are situated in a specific country.
When it concern a counterbalance fee for entering the Arctic Ocean there are no massive
investment for built infrastructure to repay, also multiple countries have a coastline in or
close to the Arctic that will be affected. Therefore, this fee could be used for different
purposes immediately.
Below, I give a suggestion that can be used for discussion for how a counterbalance fee7
could function. Decide when to start to charge on a specific cargo tonne for the ships entering
the Arctic Ocean.
A way to calculate is to use a sliding scale and increase the number for each tonne. In cargo
tonnes the X = a certain cargo tonne, X2 = is double the certain cargo tonne, X3 = is four
times the certain cargo tonne and so.
Cargo
tonnes
Price Low Co2
footprint
Price -
30%
Hazardous
cargo Price
+50%
Low Co2
footprint
Price+H.C
. -30%
Cargo
tonnes
Price Low Co2
footprint
Price -
30%
Hazardous
cargo Price
+50%
Low Co2
footprint
Price+H.C
-30%
X €5000 €3500 €7500 €5250 X5 €80000 €56000 €120000 €84000
X2 €10000 €7000 €15000 €10500 X6 €160000 €112000 €240000 €168000
X3 €20000 €14000 €30000 €21000 X7 €320000 €224000 €480000 €334000
X4 €40000 €28000 €60000 €42000 X8 €640000 €448000 €960000 €668000
The list can be a lot longer than the examples I given above.
Who hold the fee?
It is easier for the owners of the Suez and the Panama Canal that is located in one country to
hold the fee, while there are several countries situated in and close to the Arctic. Those
countries that are in the Arctic are Canada, Greenland (Denmark), Iceland, Norway, Russia
and US. The northern UK has a coastline close to the Arctic. These countries should be
involved. Perhaps, the Arctic Council could be a suitable organisation that controls the
money.
Fee priority
To start, no one have sovereignty over the Arctic Ice pack. The counterbalance fee goes firstly
to these regions and to those countries with a coastline and ports in the Arctic Ocean. Next
priority is those countries with a port or coast line close to the Arctic Ocean. And the third
priority goes to those ports in the Northern hemisphere that will receive a lot of cargo from
these cargo ships. Perhaps, in distant future marinas can be included as a fourth priority.
Fee pay-outs
In the beginning, if such a fee is adopted, it is important to prioritize what the fees can be
spent on. Since it is a counterbalance fee it needs to prioritize measures for the conservation
of species and fauna and clean-up of polluted areas in Arctic. It should also enable funding
for improvements in ports in order to build large-scale clean tech that can take of the cargo
7
Exemptions from this fee will be navy, established fishing boats in the area (local fishermen), science
expeditions.

4. Jan Softa @ Somerco
ships sewage and ballast water.8
Clean tech in sea fare could have a bright future and a way to
push the development forward is to offer part funding to implement these techs at cargo ships
that frequently travel the Arctic Ocean.
The Arctic can be a treacherous sea due to ice beneath the surface so good rescue capabilities
is important. Stein Are Hansen Head of Department, loss prevention and emergency response,
Norwegian Hull Club, Bergen has said:
"We will soon be responsible for rescuing people up to the North Pole. We need more training and sophisticated
equipment to help deal with the potential disasters. For example, fuel stations for helicopters,” he said.9
And also a fixed percentage can be allocated as an emergency fond for environmental disaster
as oil spillage and to the restoration of the area.
Divide the money
Here it is important to look at the stakeholders. These are the countries with a coastline above
the Arctic Circle and then UK and a third priority could be other countries ports, which the
cargo ships has as its destination as Gothenburg, Gdansk and Rotterdam. Before spending the
money from the fees on different measures a thorough discussion takes place and then a
voting decides. Another option is to use a rotating system between the countries and let the
people in charge be decisive on what measures should be approved during their term.
Justify why here
Most of us agree it is not a concept that can be justified to use everywhere around the globe
due to an increase in costs for cargo shipping. So why would cargo ships accept a
counterbalance fee here while we do not find it elsewhere? One reason is that historically it is
not a natural route that has been used for shipping cargo. Another reason is that the Arctic is a
very fragile environment where man has not been a dominant factor. Some would lift forward
that it is the longest passage route that involves many countries.
Final remarks
For EU, the Arctic should be an important environment to protect since some of its species
and fauna lives in a fragile environment. Therefore, a fee could help with preservation
measures. Due to that the ice belt is melting it is highly likely the cargo ships will chose this
route more often than before when they want to trade with the countries in the northern EU
and EFTA.
8
Environmental impact of shipping. http://en.wikipedia.org/wiki/Environmental_impact_of_shipping
9
Norwegian Hull Club warns on Arctic shipping dangers. http://www.seatrade-
global.com/news/americas/norwegian-hull-club-warns-on-arctic-shipping-dangers.html

5. Jan Softa @ Somerco 2014-12-19
Draft proposals
Enhance the competitiveness of EU member states Part 1 – Designated tax to science
Enhance the competitiveness of EU member states Part 2 – Strategy to support the software industry
Enhance the competitiveness of EU member states Part 3 – Actions to support women in ICT
Enhance the competitiveness of EU member states Part 4 – Going abroad–Competitive assets
Enhance the competitiveness of EU member states Part 5 – Business incubators, financial recycling and
incentives into reward
Enhance the competitiveness of EU member states Part 6 – Standardization as a tool to increase
competitiveness
Enhance the competitiveness of EU member states Part 7 – Different types of innovations
Enhance the competitiveness of EU member states Part 8 – Open source from science to society
Enhance the competitiveness of EU member states Part 9 – Crowd sourcing and crowd funding
Enhance the competitiveness of EU member states Part 10 – Green VAT for business
Enhance the competitiveness of EU member states Part 11 – Keep talent in Europe
Enhance the competitiveness of EU member states Part 12 – Research leftovers
Enhance the competitiveness of EU member states Part 13 – Science Parks - Specializations
Enhance the competitiveness of EU member states Part 14 – Patent trolls
Enhance the competitiveness of EU member states Part 15 – Science e - Parks
Enhance the competitiveness of EU member states Part 16 – Expansion options
Enhance the competitiveness of EU member states Part 17 – The locally developed infrastructure
Enhance the competitiveness of EU member states Part 18 – Treaty (Knowledge transfer)
Enhance the competitiveness of EU member states Part 19 – Different types of infrastructure
Enhance the competitiveness of EU member states Part 20 – Build infrastructure
Enhance the competitiveness of EU member states Part 21 – Energy infrastructure (elsewhere) (In progress)
Enhance the competitiveness of EU member states Part 22 – Quick market entry (Medical)
Enhance the competitiveness of EU member states Part 23 – Innovation, Commercialization, Growth
Enhance the competitiveness of EU member states Part 24 – External energy dependencies
Enhance the competitiveness of EU member states Part 25 – Old innovations
Enhance the competitiveness of EU member states Part 26 – The non-IP Parks
Enhance the competitiveness of EU member states Part 27 – Digital inequality into prosperous society
Enhance the competitiveness of EU member states Part 28 – Digital Magna Carta – exemptions in privacy
Enhance the competitiveness of EU member states Part 29 – The networked subsidiarity (In progress)
Enhance the competitiveness of EU member states Part 30 – Artic route (counterbalance)
Enhance the competitiveness of EU member states Overview – Old and new key areas in order to increase
the competitiveness of the industry (In progress)
Input on threats against information society