Recent increase in global temperatures are spelling doom for Russia. Since an estimated 60 percent of Russia is covered by permafrost all year, its thawing is causing serious adverse effects that will not only affect the environment but also the economy.

Russia Climatic Zones and Temperatures

What Makes up Russia’s Economy?

Ranked as one of the top economies of the world, Russia’s economy is highly dependent on its naturally occurring resources. Therefore, melting of the permafrost has both negatives and positives to the economy of Russia.

What are the disadvantages of Permafrost thawing

One of the major concerns of permafrost thawing is the destruction of property. Since about 60 percent of Russia is constructed on permafrost, the thawing will not only make the destroy the environment but will make the ground very unstable.

The naturally occuring stronger than concrete permafrost , will now become weak to carry the much needed industries , roads and commercial buildings.

According to a report by World Finance, the estimated loss caused by the thawing will be intune  of  RUB 150bn ($2.34bn) in a single year!

Furthermore, defrosting of the permafrost could destroy vital infrastructure, which will cost Russia $84 billion by the year 2050. The amount will mean an estimated loss of 7.5 percent of the total GDP.

Currently , Russia is experiencing major infrastructure damages both inland and on its shores.

Is there hope for Economic stability for Russia?

There seems to be a glimmer of hope for Russia as the permafrost melts. Just like Stalin’s dream of making Russia an Economic power house, the Economy of Russia may benefit heavily from the thawing.

One of the major ways in which Russia might benefit is the unearthing of fossil fuels that have been inaccessible due to the hardened permafrost. The US Geological Survey estimates that the Arctic may hold upto 20 percent of  the remaining volume of oil and gas. Having such large reserves of oil and gas, Russia is likely to become a leading economic superpower. With oil prices expected to peak in the coming years, Stalin’s dream might be achieved.

Secondly , Russia is looking to bank on being the gatekeeper of the Arctic. With the receding shorelines, larger ships are expected to pass as they access the arctic and other regions. The melting of the permafrost is also adding more water meaning heavier ships can pass easily. According to the Financial times, the passage will be integral for transportation of goods to Europe and Asia.

Furthermore, opening of the canal has placed a possible revenue stream from ship building, which is lucrative business.


Russia’s plan to repopulate the arctic and monetise it , seems like a long shot. However, based on brilliant reinvestment in the formerly frozen in time locations may be a good idea that may see Russia become an economic powerhouse.

On the contrary , the changing reliance on fossil fuel may mean doom as more countries shift towards clean and greener energy.

The future is unforeseeable due to the dynamic changes both in the environment , financial and social standings. Mother nature might decide to surprise all of us!