As a source of potential wealth the environment with its natural resources can easily fuel tensions between neighbours and endanger the security of people living in the region. Threats may stem directly from environmental impacts on health and well-being, but also from conflicts triggered by the associated pressures.
To further complicate matters, the region’s political order has recently been reshuffled and there remains an unresolved dispute about territorial claims to the sea basin and the natural resources that may be found there.
In areas where the economic interests vested in natural and mineral resources are as strong as around the Caspian, environmental protection tends to be a low priority. But some of the natural resources such as fish, which form the basis for human survival and economic activities in the region, depend on an intact environment. The exploitation of other natural resources is particularly profitable, because little account is made for possible negative side-effects.
The region’s valuable natural resources – some non-renewable such as oil and gas, others renewable such as fish – are an important factor in relations between states and the various communities living around the Caspian sea. In particular they may create international tension, as for instance with the ongoing discussions about sustainable exploitation of fish resources.
With dwindling overall oil resources, enduring instability in the Middle East, new markets and rising demand for energy, many players have good reason to be interested in the Caspian basin and the export of its resources: states (the producers themselves, the countries through which products transit, and end users), and oil and gas companies. In principle it is in the interest of such players to maintain regional stability in order to secure investments in the energy sector.
Clarifying territorial limits to prevent conflict
Access to hydrocarbon resources has caused several disputes between the five states bordering on the Caspian. The uneven distribution of hydrocarbon resources gives rise to disputes over oilfield ownership. There is also disagreement as to how best to use the sea (separate or joint exploitation). The inadequate legal framework and overlapping claims to ownership have made it more difficult to find solutions to these disputes. Preference has so far been given to bilateral agreements to facilitate the exploitation of the Caspian’s energy resources.
Transport of oil and gas further complicates conflicting interests and claims, and brings additional players into the game. So far the main export pipelines run through Russia. A recently developed alternative, the Baku-Tbilisi-Ceyhan (BTC) pipeline that started operation in 2005, opened a new possibility for transporting 1 million barrels of oil daily. Other similar pipeline projects are also being developed like the one that goes through Kazakhstan to China.
Managing natural resources fairly: a challenge for energy-producing states
The skill with which a state manages its natural resources (a capability that may vary with time) will impact on its economic and political stability. Over-emphasising the development of the energy-extraction resources can weaken an economy’s manufacturing sector – an error also known as Dutch disease or resource curse. Dependency on a small number of commodities for export earnings may increase the country’s vulnerability to trade shocks, which may in turn cause instability and dissatisfaction among groups affected by such shocks.
The natural conditions in the Caspian Sea region are harsh, with the exception of the southern and western coast. The dry climate, with large variations in temperature between summer and winter, severe winter storms and a shortage of drinking water makes it difficult to sustain human life. Every activity leaves its mark and the environment is particularly vulnerable.
The quality of drinking water along the coastline depends on groundwater resources and desalinized water from the sea. Exploitation of petroleum reserves or faulty operation of the corresponding facilities pollutes both surface and groundwater. Sturgeon, from which caviar is produced, and other commercially important fisheries need an intact environment. But this requirement conflicts with large-scale water management projects, such as irrigation and dams for hydroelectric power stations, and the exploitation of off-shore oil and gas fields, with the heavy oil tanker traffic it entails.
In many places around the Caspian tourism plays an important part in the local economy. It will only continue to do so if the beaches stay free from pollution and attractive to tourists.
Impact of smouldering conflicts
The frozen conflict in Nagorno-Karabakh and adjacent regions of Azerbaijan, as well as a more than decade of unrest and military operations in Chechnya, Russia, has triggered flows of refugees and led to the neglect of environmental management in these areas. While the latter resulted in more uncontrolled pollution, certain environmental issues such as deforestation and the alleged burial of hazardous wastes in Nagorno-Karabakh have become politicised. Both areas are linked to the Caspian environment through shared surface and ground water systems.
Allowance must also be made for unpredictable risk factors. Over and above conflicting interests, some scenarios suggest that drilling for oil and gas could seriously affect the sea level and, worse, trigger earthquakes in this seismically active region.
Furthermore, however clean modern oil production may be, it involves the risk of accidents causing serious pollution, typically oil spills during transportation. Nor can it completely avoid continuous emissions during operation. Pollution pays no attention to borders, and pollutants carried over large distances by tributaries aggravate already acute local pollution downstream. Environmental pollution has transboundary effects that need to be tackled multilaterally.
At another level, although scientific models of the effects of rising temperatures are improving, it is not yet possible to predict exactly what will happen when nature adapts to changing climatic conditions.
The need for multilateral solutions
Ongoing disputes and disagreements over the management of natural resources shared by two or more states can deepen divides and lead to hostilities. But common problems regarding the use of natural resources may also bring people together in a positive way. Communities and nations can build mutual confidence through joint efforts to improve the state and management of nature. Environmental cooperation can be an important way of preventing conflicts and promoting peace between communities. Furthermore the environment is a suitable topic to focus people’s attention, in particular when they are personally affected. Raising people’s awareness of the stakes may be a way of promoting more active participation in political life, and, ultimately democracy and shared economic prosperity.
By signing and ratifying the Framework Convention on the Protection of the Marine Environment of the Caspian Sea (Tehran Convention) the signatories – all five bordering states– signalled that they are willing to search for common strategies to protect the Caspian environment. Having agreed in principle on common action towards the control of activities impacting the environment they made a step towards stability in the region.
The Tehran Convention is an example of how the strategy of using the environment as a means to create a multilateral dialogue can be successful. Whereas the countries are still negotiating their offshore territories with little hope of a settlement in the near future, a main agreement on the environment has proved possible, temporarily working around the sensitive topics. Even if the convention expresses nothing more than the will to address an issue, it is a successful achievement as such. It now needs to be followed by more concrete commitments.
The efforts to realise the promises of the Tehran Convention are reflected in the preparation of several protocols to the convention: the Biodiversity Conservation Protocol, the Protocol Concerning Regional Preparedness, Response and Co-Operation in Combating Oil Pollution Incidents, the Protocol for the Protection of the Caspian Sea against Pollution from Land-based Sources, and the Protocol on Environmental Impact Assessment in a Transboundary Context. These protocols, once adopted, will become binding legislation with which the countries must comply. The process is supported financially and thematically by the Caspian Environment Programme (CEP). Major UN agencies such as UNDP and UNEP, but also the European Union with its TACIS programme, are involved in its implementation. At the national level, the governments of all the Caspian states have committed themselves to implementing National Caspian Action Plans.