Use Emerald Dragon Seal anywhere on Emerald Dragon Island to summon the Emerald Dragon. Defeat it, then return to Harkas.

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Introduction

Harkas told you that he has been waiting for a hero to come to Emerald Dragon Island for a very long time, and that he believes that hero is you. He tells you that something has gone wrong, which may be why the Guardians have been acting strangely. Harkas gave you the Emerald Dragon Seal; you can use it to summon the Emerald Dragon, then defeat it to capture it.

NPC Dialog

Since I was very young, I've been waiting for a hero
to come to this land. I am sure that your
appearance here during these troubled times is no
mere coincidence. Though the Guardians of Fate
were sent here by Odin to protect an ancient power,
it's clear to me that something has gone very wrong.
Perhaps you will be the one to fix this mess. Take
this seal; you can use it to summon the Emerald
Dragon, but make sure you are completely prepared
before you act. He is an exceptionally formidable
foe.

Quest Completion

To have captured the Emerald Dragon... you are
truly capable of miraculous deeds. You may yet be
able to change this world!