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This is a town built on ice, which is a real concern to Norm Carlson, who runs Dawson City's public works.

He has seen the early warning signs of climate change: massive spruce beetle infestations, extreme wildfire and fast spring floods.

Next up: melting permafrost.

For this outpost of 1,500 people, 100 kilometres from the Alaska border, that could lead to the destabilization of the town's dirt roads, buried sewers and water lines, which are encased in naturally occurring ice or frozen muck two metres below the surface.

"If the permafrost fails here, everything is going to snap," Mr. Carlson said. "It just can't take that kind of movement. Roads would melt, the whole town would sink. We would lose all our infrastructure wherever there is ice in the ground. It would be soup."

There are early signs of a problem. In February, one section of a water line dropped 25 centimetres at a joint, causing a large tear. The problem was discovered when water filled, then froze, a manhole nearly a block away. The damage was repaired at a cost of $20,000.

Crews are constantly on the lookout for sinking ground and frozen manholes. The longer the water runs underground unchecked, the more it melts the ice, further destabilizing the infrastructure.

"Once you have a break in Dawson, it saturates all the ground around it," Mr. Carlson said. "If that's a permafrost area, it stays saturated and you have seriously weakened the infrastructure around the whole area."

Chris Burn, a geography professor at Carleton University in Ottawa, has spent more than 20 years studying the effects of climate change on permafrost in the North, including central Yukon.

Warmer air temperatures heat the ground and cause a warming of the active permafrost layer, he said. In Dawson City, the active layer is filled with natural groundwater that freezes in winter and runs in summer. This freeze-thaw cycle causes the ground to heave during fall and spring.

The active layer is up to five metres thick in Dawson City and lies on top of deep permafrost that does not go through an annual freeze-thaw cycle.

A greater than average snowfall, which the town has experienced the past three winters, insulates the earth and prevents summer heat from escaping into the air, further warming the ground.

The warming of the active layer, because of climate change and human activity, will destabilize the ground and any infrastructure that it supports, Dr. Burn explained.

"In Dawson there is quite a lot of ice in the ground. It's what we call ice lenses. When those thaw out, we lose volume in the ground. There is nothing to hold the structure together."

Dr. Burn has been stationed in Mayo, a village 200 kilometres east of Dawson City, since he began his investigations in the 1980s. In the village he has studied the soil and measured the warming temperatures of the deep and active permafrost layers.

In the past three years, the summer temperature of Mayo's soil has jumped to 6.5 degrees from 5.5.

That is a dramatic increase, Dr. Burn said, but it will not happen in Dawson so quickly because the ground will warm only after the ice disappears, and ice is difficult to melt.

Mayo is different than Dawson City because the active permafrost layer melted quickly when the townsite was created in 1902. This now allows for consistency in building infrastructure projects because the ground moves little in the freeze-thaw cycle.

Dawson City is not so lucky, Dr. Burn said.

"The difficulty in Dawson is that hasn't actually happened yet. It's still got quite a long way to go before the active permafrost is sufficiently deep down that it doesn't affect what's happening near the surface. In the long run, it is good that things are thawing out. At some point, things are going to become stable.

"In the time scale of centuries, it's short-term pain for long-term gain. In the time scale [residents]are looking at, it's a pain in the neck."

That is small consolation for Mr. Carlson, the public-works manager. The town's water and sewer maintenance budget for 2006 is set at $1-million, an increase of $340,000 from 2005.

Some of that budget will go toward replacing water-line joints with stronger seals that can endure the strain of the shifting earth. Other funding will go toward a continual upgrade of sewer pipe that is stronger and more flexible than what was installed in 1980. Most of this pipe was crushed by the shifting ground a decade after it was installed, and is slowly being replaced.

Spending thousands of dollars to dig up the street and fix a leaky water line or crushed sewer pipe is a short-term approach to dealing with a failing system, Mr. Carlson said, so the municipality must continue to adopt long-term approaches to dealing with a shifting environment.

"Engineers would come up here today and design something, and I would have comments. They would design typical southern construction. Northern construction is different. We have experience in that type of thing. I think in 50-year terms because I know the difficulties in trying to fix these types of things."

The difficulties are often dramatic. A failure to properly address melting permafrost before the construction of the town's hockey arena in 2000 not only resulted in an unstable structure but bankrupted the municipality.

The active permafrost layer below the ice rink failed to freeze after a concrete pad was poured on top of the disturbed soil. Warm air was trapped below the pad, which cracked when the air temperature dropped to -40.

Costs more than doubled to $10.5-million from $5-million, not including legal fees for the municipality, which went bankrupt before the territorial government ousted the mayor and council in 2004. The town has operated without a democratically elected council for nearly two years.

The concrete pad was chipped away and removed in 2005 and the warm air was released. Hockey players are again skating on grade, and artificial ice on permafrost was declared a colossal failure in Dawson City.

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