The Arctic Circle, geoeconomics competition, and dominance in the multipolar world of the 21st century: The case of Greenland through the lens of Risk Management

Abstract

In the emerging multipolar order of the 21st century, the Arctic Circle has become an arena of geopolitical rivalry, environmental change, and economic opportunity. This study examines how the European Union (EU) can manage escalating risks through international risk management frameworks, using Greenland as a focal case. Owing to its vast resources and position between Europe and North America, Greenland’s importance has grown considerably. Rapid climate change has transformed the Arctic from a remote frontier into a hub of global competition, as melting ice opens sea routes and access to critical minerals, intensifying rivalries among major powers. Recent U.S. actions on Greenland’s sovereignty further reinforce the need for a cohesive EU strategy. Applying the PESTLE framework, the study identifies key risks – militarization, sovereignty disputes, resource competition, technological dependence, legal ambiguity, and ecological degradation – and develops three scenarios: Baseline, Adverse, and Extremely Adverse. Monte Carlo simulation indicates that the baseline scenario is the most likely (79%), whereas higher-escalation scenarios account for a notable combined probability (21%). The findings suggest that the EU’s Arctic policy remains fragmented, underscoring the need for a proactive, coordinated strategy focused on diplomacy, deterrence, and technological autonomy.
JEL Classifications: D81, F51, O13, Q34, Q54.
Keywords: Arctic Circle, Geoeconomic confrontation, Greenland, Risk Management, Scenario Planning