MOSCOW, August 18. /TASS/. The development of the Arctic by 2035-2040 may proceed under three scenarios - from controlled growth to fragmentation, where institutional sustainability and regulatory quality are key factors, Deputy Chairperson of the Public Council at Russia's Ministry of Natural Resources Svetlana Lipina told TASS.

"Briefly and to the point: the main economic risk is institutional constraints," the expert said. "Commodity market volatility and climate uncertainty are important, but they may be hedged financially, technically and operationally."

The critical factor of sustainability is anyway not the external environment, but rather the lack of uniform and predictable rules, as well as insufficient coordination between states, regions and local communities, she continued. "The lack of clear rules, infrastructures, accountability and coordination make projects untenable and increases systemic risks to an unacceptable level," she stressed.

The expert presented three basic scenarios for the development of the Arctic by 2035-2040. She called "managed discovery" the most favorable option with coordinated investments in ports, icebreaking fleet, response systems and public-private mechanisms. Under this scenario, the Arctic becomes a sustainable center for transit and resource extraction with a high degree of institutional coordination.

The second scenario - "market shock" - means rapid capital inflows amid high commodity prices, increased shipping activity, and project expansion. However, if poorly managed, this can lead to accidents, environmental costs, and instability of logistics chains. The third scenario - "fragmentation and restrained development" - is associated with increased geopolitical barriers and a decrease in investor interest in big-scale projects. In this case, development is local and resource-based, while the lack in infrastructures and ecosystem vulnerability still persist.

In her opinion, the state and international policy should have a clear priority of strengthening institutions: the formation of clear rules, the creation of accountability funds, and the development of international incident response protocols. The expert also stressed the importance of investments in marine and environmental infrastructures, as well as a broader involvement of indigenous peoples in management of Arctic territories.