From Iceland — Iceland's Low Carbon Illusion

Iceland’s Low Carbon Illusion

Published June 3, 2023

Iceland’s Low Carbon Illusion

Exploring Iceland’s efforts to addressing climate change

We are living in a time where every aspect of our daily lives is touched by the effects of the climate crisis. We see it first hand here in Iceland. Glaciers are melting, weather patterns are changing, wildlife populations are in decline. None of this is new. We’ve been living in a world affected by the impact of human activity since the very dawn of humanity. After all, all living creatures impact their surroundings and environments in some way, no matter how lightly they tread.

But human impact on the environment has grown to an extent that it may have ushered us into a new epoch. The Anthropocene is a term coined by Paul J. Crutzen and Eugene Stoermer in 2000, a combination of anthropo- from the Ancient Greek meaning “human,” and -cene meaning “new” or “recent.” Some suggest the Anthropocene began with the advent of farming and the mass augmentation of landscapes that ever-growing agricultural practices brought about. Others posit the hypothesised epoch began around 1950 when nuclear weapons spewed radioactive elements around the globe.

Illustration by Kosmonatka

The International Commission on Stratigraphy has yet to graduate the world from the Holocene, the geological epoch that began more than 11,700 years with the Holocene glacial retreat. Such temporal units are classified based on the features of the Earth’s strata and the fossils contained within them. However, a working committee at the commission made the case in 2019 for recognizing the Anthropocene as a formal chrono-stratigraphic unit.

Whether we acknowledge the dawning of a new epoch or not, there’s no getting around the fact that the world is in the midst of a climate crisis. The question is what are we going to do about it?

What is Iceland doing about it? How will Iceland’s climate targets bring about positive change for the country and the world?

Is there a path beyond the Anthropocene?

Where actions fail to meet targets

“They’re only reaching about 28% of their commitment,” explains Smári McCarthy, a software developer and former Pirate Party MP now focused on creating accessible climate data through his startup Ecosophy. He’s referencing the Icelandic government’s goal of a 55% reduction in emissions by 2030. The next aspirational milestone is carbon neutrality by 2040. “And that’s about half of where they should be. So obviously, they need to do more.”

The Icelandic government released its current climate plan in 2020, reaffirming those aforementioned targets and delineating how it will implement changes across various sectors to achieve emissions reductions. It estimates a 21% decrease in carbon dioxide emissions from land transport, a 42% reduction in emissions from ships and ports, 67% fewer emissions from energy production and small industry and 66% fewer emissions from waste management.

The emissions of Iceland’s heavy industry – including silicon plants and aluminium smelters that set up shop in the country lured by the promise of cheap and abundant geothermal energy – will be addressed through the European Union’s Emissions Trading System (EU ETS), a cap and trade system that sees companies buy emissions credits from within the participating region. The EU ETS has a regional goal of reducing emissions by 43% over 2005 numbers by 2030.

Iceland is importing so much and producing so little of what is utilised in society. It’s a hugely affluent country and actually relies extremely heavily on others to produce what Icelanders think they need or what they want to have in their lives.

“When they started talking about this, they had 10 years to do it,” Smári recalls. “We now have seven years until 2030. I don’t think there’s been a reduction of 300,000 tons per year in those three years since that was decided. So the problem is that, they’re all looking at these big goals, but they’re also kind of hoping and dreaming that it will somehow magically materialise the day before the deadline and that’s not really a good strategy.”

“One thing I would like to see happen,” he continues, “is that we start measuring modelling and enacting policy on the basis of the outcomes of those models because otherwise we’re mostly just firing large sums of money out into the world, into the ether, the cosmos, and not necessarily knowing if it’s being effective and that’s not good for the government – that’s not good for anybody.”

The constant focus on CO2 is also something that Smári believes needs to be reconsidered.

“The problem with a lot of discussions about climate change is that they are primarily focused on the CO2,” he explains. “CO2 is a great metric for the scale of the problem, but it’s a terrible metric for the effectiveness of the solution, in the sense that even if we could remove all CO2 overnight to pre-industrial levels, that wouldn’t necessarily mean that our planet is healthy since we’re in the middle of like a mass extinction event. There’s massive desertification, massive damage to ecosystems that we rely on to keep the atmosphere and the oceans in balance.”

The three new Rs

Children have long been taught the importance of heeding the three Rs when it comes to managing their own impact on the environment. Recycle, reduce, reuse. The terms are straightforward enough for children to understand and should be easy enough to grasp for adults to implement.

Recycle what you can, reuse what can’t be recycled and reduce overall consumption. These three Rs form the philosophy of the circular economy, which climate scientists have estimated could address some 70% of global greenhouse gas emissions if taken up on a large scale by corporations worldwide.

However, at the OK Bye conference that took place May 24 as part of Iceland Innovation Week saw the focus centred on three new Rs: Reduce, recapture and repair.

Ocean Visions CEO Brad Ack said that while the world has been largely focused on emissions reduction – which is critical – we need to boost our collective focus on carbon removal and environmental repair.

“If we want to actually restore our climate, restore the planet, we have to do much better and we have to clean up the entire mess. Just like we learned in kindergarten: clean up your mess,” he said. “We’ve got to clean up this giant mess we’ve created in the atmosphere that’s trapping all this heat and we have to do it fast, and it’s going to take innovation. And I love the leadership Iceland is showing in creating spaces for that innovation to happen and that research and development and testing and ultimately scaling.”

We have to clean up the entire mess. Just like we learned in kindergarten: clean up your mess.

That leadership was on display later in the conference when Minister of Higher Education, Science and Innovation Áslaug Arna Sigurbjörnsdóttir lauded Iceland’s “þetta reddast” motto as the reason why it’s the perfect place for startups and larger companies to come and set up operations. This was another major focus of Iceland Innovation week, with the term “eco-industrial park” floating around in several panel discussions and presentations.

Jumping at opportunities and acting with speed rather than long-term thinking and intention has gotten Iceland into trouble in the past. Is it really the best approach to take when it comes to something as serious as the climate crisis?

“I’ve said to Áslaug that we need to be enacting not just arbitrary climate policies, but something more akin to an industrial policy,” Smári says. “It sounds like a horrible word because everybody thinks industry is dirty, industry is bad; but industrial policy is just a structure around making decisions about what kinds of things are being promoted and supported by the government. You have to have the ability to have some level of foresight in the government to at least indicate what kinds of things are not going to be desirable and select [projects or opportunities] with that in mind.”

He continues, “If the government were a little bit less boastful and more entrepreneurial, maybe we would get some progress on that.”

Part of that entrepreneurial spirit is being embraced by the country and its national power company Landsvirkjun actively courting companies to move in and set up operations in one of a handful of “eco-industrial parks” (EIP) being established around the country. These EIPs are areas where companies operate in somewhat of a symbiosis, with one company potentially using the runoff from their neighbour to fuel part of their own operations.

The ethos of EIPs, according to Landsvirkjun, is based on the circular economy in that they create opportunities for manufacturing companies to improve power utilisation and put waste and by-products from their production to use at neighbouring companies. The focus, however, as outlined by a panel moderated by Landsvirkjun at Iceland Innovation Week, is on the exploitation of Iceland’s abundant geothermal energy and the option of one company in an EIP buying a massive amount of energy for an even more discounted rate and then selling that power to their neighbours, allowing all of them to pay even less into the local economy than they otherwise would.

How that is good for Iceland’s bottom line or for its ultimate goals of reducing emissions is a mystery. Though it’s clear how it benefits industry and Landsvirkjun.

Landsvirkjun hypothesises that the creation of EIPs would be in line with the needs of the local communities in which they operate, but the ease with which small communities have been lured into welcoming heavily polluting smelters into their fjords in exchange for jobs that will keep the village alive for a few more years has happened before. How EIPs would differ (beyond the branding) remains to be seen.

Thinking outside our borders

One glaring issue with the government’s climate targets is that they fail to take into account Iceland’s larger carbon footprint once its imports and consumption is taken into account.

While Iceland does a stellar job of marketing itself as a green utopia on account of our abundance of geothermal energy and our relatively eager uptake of electric vehicles in recent years, when it comes to consumption there’s no getting around the fact that we are a heavily importing and very wasteful nation.

“I think the important question is if it is enough and okay to just look at what happens within the country,” says Jukka Heinonen, a professor of Sustainable Built Environments at the University of Iceland’s Faculty of Civil and Environmental Engineering. “And Iceland is a great example in this context because it’s importing so much and producing so little of what is utilised in society. It’s a hugely affluent country and actually relies extremely heavily on others to produce what Icelanders think they need or what they want to have in their lives.”

Jukka has published studies on the consumption-based carbon footprint of Icelandic households and found that, despite the country’s green energy, household emissions in Iceland are equivalent to households throughout the EU. In fact, he found that Iceland’s actual carbon footprint is 55% higher than the emissions it is generating within its territory simply because of the volume of goods it imports. In this way, the burden of the emissions driven by Icelandic consumption falls squarely on developing nations.

There could be growth in those sectors that are beneficial in terms of mitigating climate change, for example, and providing well being. That would be looking beyond just the economic perspective to it and instead look at the real well being and the future well being of society.

The result is what Jukka has called a “low carbon illusion” where affluent countries believe they’re curbing their emissions, but global emissions continue to grow.

“If you only look internally, then the situation can end up that a country – our country – can be declared a model for a low-carbon future. And then at the same time, the global emissions just go up and it’s not because of other countries or not necessarily because of other countries not caring about climate mitigation, but because they are producing what is being exported to these so-called climate leader countries,” Jukka explains.

“So I’m a little bit worried about this kind of focus entirely on what happens within the boundaries of a certain country or this territorial perspective to emissions,” he continues, “that it will lead to not very successful climate change mitigation because then it allows for the outsourcing of emissions to other countries.”

Other nations have announced in recent years that they’re going to be taking more responsibility for these spillover emissions. That is the direction Jukka hopes climate leaders like Iceland will also take. Its larger global carbon footprint is also an important metric for Iceland to consider as it undertakes large scale development projects that require the import of mass amounts of construction materials at the same time it is trying to meet emissions targets.

“Iceland is actually trying right now to measure or at least get a general idea of these so-called spillover effects,” Jukka explained. “And I think that the next step would need to be that it would be quantified in a robust, acceptable way. I would like to see that the step beyond that would be that Iceland would at least have some kind of a future target when they would start taking some kind of a responsibility over those emissions as well.”

In addition to Iceland thinking beyond its own borders when calculating its emissions targets, Jukka would like to see a shift in how the country provides the highest amount of well-being to the population without it being linked solely to economic growth. “There could be growth in those sectors that are beneficial in terms of mitigating climate change, for example, and providing well being,” he says. “That would be looking beyond just the economic perspective to it and instead look at the real well being and the future well being of society.”

Putting their money where there mouth is

The problem is that, they’re all looking at these big goals, but they’re also kind of hoping and dreaming that it will somehow magically materialise the day before the deadline and that’s not really a good strategy.

As Ack told the OK Bye conference, “the current approach [governments have been taking] is incremental and the change is exponential. We’re trying to beat an exponential problem with incremental actions. That is a receipt for failure.”

The good news, if innovators in the climate space are to be believed, is that we have the tech and the knowledge and innovation to take more and bigger action against the problem. What is needed is money to fund these solution.

“When I was in parliament,” Smári recalled, “I was asking like, ‘OK, you’ve got this great ambition here. Where’s the money to back it up?’ Because at the end of the day, anything that the government does needs to be paid for. If you’re not paying for the outcomes, you’re not actually going to get the outcomes.”

If the government is going to make a real dent in its climate goals and not simply continue to fall back on its self-perpatuated images as a geothermal haven, there has to be more money funnelled into forestry, bike lanes, taking old cars off the road and other similar initiatives that Smári said have positive impacts. There has to be a shift to self-reliance, local production and more accountability for our environmental impact as it extends far beyond our borders.

There is a chance for Iceland to make significant steps toward reaching its climate goals and to contribute to the world collectively reaching a place where we can focus on repair and graduating into a symbiocene, a place where we’re working with and for nature rather than continuing on the destructive path we’ve been on.

It’s going to take more than geothermal energy and electric cars.

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