Albedo is a term for the reflectivity of a surface. In recent history, the Arctic has reflected the majority of solar radiation back up into the atmosphere, thanks to to the large expanse of snow and ice cover. Bare land or dark open water has the opposite effect, however, and instead absorbs heat from the sun."

In the past few decades and especially in the last few years, the trend has been for less snow and ice cover in the Arctic. Some studies have found that the Arctic is losing four percent of its snow cover a decade, while the ice is diminishing even faster, at a rate of more than eleven percent a decade. As the open water absorbs heat it warms, and as a consequence, expands. This is what leads to rising sea levels.

Last year’s summer ice cover was one third less than the average from 1979 (when satellite monitoring began) to 2000.

As this warming cycle continues in the Arctic, it in turn influences global weather patterns, by changing wind and water currents. The global weather is driven by the differences in air temperature between tropical regions and the poles. As these differences are changed by a warming Arctic, global weather patterns are destabilized, creating new more unpredictable and more extreme weather events at lower latitudes.

Another effect of Arctic warming is global sea level rise.

The warmer Arctic Ocean waters in combination with the rising air temperatures are already increasing the melt of the Greenland Ice Sheet. The estimations of the contribution of this melting ice sheet to global sea level rise have been increasing recently with the realisation that the Arctic as a whole is warming faster than previously expected.

Some of the latest predictions suggest that global sea levels may well rise as much as 80cm by 2100, partly as a consequence of melting in Greenland. This would have a devastating impact on the lives of millions of people across the globe.

Indeed, the Stern Review on the Economics of Climate Change states that an increase of between 20 and 80cm of sea level rise, could lead to up to 300 million people being flooded each year. Around 80 percent of the Maldives 1,200 islands are no more than one metre above sea level; the 360,000 citizens could be forced to evacuate in the next 50 or so years. A rise of between 8 and 30cm could lead to Indonesia losing up to 2,000 of its 17,508 islands.

Scientists have major concerns about 15 major cities across the globe, 13 of which lie in coast-plains. If current warming trends continue, cities such as London, Bangkok, Alexandria and New York will end up below sea-level, displacing millions and causing vast economic damage if adequate flood protection measures are not put in place.

An international power struggle is already underway, as governments rush to stake claims on territory promising oil, gas, mineral deposits and other natural resources. A cold war between countries surrounding the Arctic Ocean is already potentially brewing which, if allowed to escalate, could have devastating global consequences. What is the main cause of this sudden territorial interest? Up to 25% of the Earth’s known oil and gas reserves lie under the seabed, currently unreachable below the Arctic Ocean floating sea ice cover.

Russia has already tried to claim 50% of the seabed area. Having planted a rustproof titanium flag on the ocean floor Russia hopes to secure the estimated 10 billion barrels of oil beneath. Former Russian President Vladimir Putin has described the urgent need for Russia to secure its "strategic, economic, scientific and defence interests" in the Arctic. Canada, Denmark, Norway and the US are staking similar claims too. This substantial fossil fuel reserve will be one of the last, and therefore most important, energy supplies in the global economy.

Most of the world’s trade of goods is done by ship. At the moment most shipping travels across the central oceans of the globe. The European Space Agency announced in Autumn 2007 that the most direct shipping route from Europe to Asia (across the top of the world), The Northwest Passage, is now free of ice for the first time since records began. The ESA also reported that the Northern Sea Route (aka the Northeast Passage), across the top of northern Russia, has also seen its ice cover shrink and is currently only partially blocked. Both NW and NE Passages were open simultaneously for the first time ever this summer.

The opening of the sea routes is already leading to heated international disputes. The economic impact on existing shipping ports and hubs elsewhere in the world will be significant as shipping volumes decline there. The environmental impact on the Arctic region, as the infrastructure needed to support the new trade routes is established and shipping activity increases, again will be significant.