From Iceland — Will Your Party Support the Continued Build-up of Heavy-Industry in Iceland?

Will Your Party Support the Continued Build-up of Heavy-Industry in Iceland?

Published April 13, 2007

Will Your Party Support the Continued Build-up of Heavy-Industry in Iceland?

Ármann Kr. Ólafsson
The Independence Party

For a long time, the simplicity of the Icelandic economic system was cause for concern. It was based on few foundations where the fishing industry stood head and shoulders above other professions. There was a reason for the leaders of this country to put an emphasis on strengthening and further developing the foundations of our economy. Both of which succeeded. The Icelandic fishing industry is now one of the strongest in the world and probably the only one that is not subsidised by the government; on the contrary, Icelandic fishing companies pay an admission fee to the national treasury for utilising our natural resources. The tourist industry has gone from being a weak profession operating in a small market,to being a powerful industry operating around the world. Multi-national corporations in the fields of pharmaceutical, finance, and software have been founded. Lately, the entertainment industry has blossomed and there seems to be no end to that venture. Heavy industry has played a big role in this transf ormation and the advancement of the Icelandic economy. It has bridged the gap between Iceland being a country of primary production, to being a country of commerce and transactions. Given the current conditions, it can hardly be considered important from an economic perspective to dive into further developments in heavy industry. Such decisions need to be made carefully and we are certainly not missing out on anything if we slow down, since energy will only become more valuable as the years pass. The Independence Party will none the less continue to support sensible utilisation of our energy resources and heavy industry is one of the options to consider.

Sæunn Stefánsdóttir
The Progressive Party

The Government recently deregulated the power industry and introduced competition in line with general EU regulations and does not plan to take the lead in further energy-intensive development as a result of the new energy act. Future initiative in this field will be carried by the investors, power companies and local municipalities in direct negotiations and in accordane with the existing regulatory system. For decades, the government’s agenda has been to promote the utilisation of Iceland’s clean and renewable geothermal and hydropower energy resources in harmony with the environment with the purpose of striving for sustainable power development, diversifying industrial activity, further improving living standard of the people, stimulating foreign investments and to enhancing exports. The economy of Iceland is based on the country’s natural resources. For a long time the fishing industry has been the backbone of foreign currency earnings. Now other industry such as energy intensive industry has brought about diversification, which is beneficial for the economy. Iceland’s future does not depend on aluminium alone. The emphasis is on well-balanced development in all sectors: industry, manufacturing, culture and services like transportation, finance, tourism and health care. Iceland has only a few natural resources: the grasslands, the fish stocks and renewable energy resources. In addition there are the human resources of 300,000 people. Agriculture and the fishing industry have exhausted the two first resources to the extent of stagnation, whereas the energy resources have only been developed to a limited extent or 17% in terms of the total electrical power potential. The Government is also paying much attention to other issues like high-tech industry, which is expected to grow substantially in the coming years.

Guðmundur Steingrímsson
The Social Democratic Alliance

Samfylkingin wants to postpone further plans for heavy industry and energy until a framework plan for environmental protection has been finalised and approved. Such a framework is expected to be 5 years in the making. The plan would stipulate which areas to protect and which areas could be harnessed. Scientific research on Iceland’s nature is lacking, so there is little basis for forming an informed opinion on the matter. This needs to change before further actions are taken for building dams and subsequently heavy industry. Because a certain chaos seems to surround this issue, it seems obvious that we need to pull in the reins. Due to the nature of heavy industry and its magnitude, regarding both environmental and economic factors, it is clear that better organisation of the decision-making process is called for, as to where and if such constructions should be build. Heavy industry can be a wise alternative under the right circumstances. But we must also consider that it is not clear if there is room for an increase in heavy industry in Iceland if we intend to honour our obligations to green house gas omission. It is also highly disputable whether there is a foundation for further heavy industry developments in the same manner as the government has done, that is, with state guarantees on loans for the developments and selling electricity at a fire-sale price. The Social Democratic Alliance believes there are strongarguments for selecting other ways to strengthen employment in the country. The party has put forward proposals to strengthen entrepreneurship, inventive, and high-tech companies, which have been well received. The party also believes the best opportunity to develop employment in the country lies in strengthening the education system.

Katrín Jakobsdóttir
The Left-Green Movement

No, obviously not. The Left-Green Movement has proposed that all further plans for heavy industry be stopped. That is the first premise for social- and economic stability; and allows us room to form a holistic plan for environmental protection, which will form a strict frame for further harnessing of hydro-energy and geo-thermal power. Until that plan is available, all further plans for heavy industry are impossible. The current policy of drowning land has to come to a stop. We need to prioritise with an eye towards nature, assess the value of protecting Icelandic nature in a local and global perspective nd form a nature preservation plan, along with our obligation to international treaties on air pollution, before continuing any plans for power plants or heavy industry. This is why it is strange to hear the current coalition renounce the heavy industry policy and put on a green coat while plans are underway to build three or four new smelters along with the accompanying hydro power plants. Our country is fulof priceless natural pearls and I believe that with continued discourse on environmental protection, this fact will dawn on people. Heavy industry projects have already created great tension in our economic system and to reduce that tension, lower the inflation, and correct the trade deficit we will need to revoke further plans for building dams and heavy industry. The current heavy industry policy also bears witness to the government’s centralised employment policy. Instead, the Left-Green Movement emphasises that we create fertile ground for general employment development, especially for small and medium sized companies and by supporting innovative companies. We want to utilise knowledge and entrepreneurship and be guided by inventiveness and creativity.

Magnús Þór Hafsteinsson
The Liberal Party

Stopping development in energy-intensive industry in Iceland for good is out of the question. This industry has created a lot of secure jobs and delivered a lot of revenue to our society. On the other hand, it is time for Iceland to slow down in these matters. We need to cool off the economy after years of constant development. We need to choose our next steps carefully and prioritise firmly. This is where politicians have a big role and they cannot escape responsibility. The Liberal Party believes it is important to allow areas with rich energy resources to make use of that within the area. Urban areas should be allowed to enjoy their natural resources. The energy should not be transported long distances to be utilised somewhere else. This way, population policy is also assisted, but the Liberal Party believes that strong urban areas are important for development of Icelandic society in the future. As for utilising energy, we should look towards geothermal energy over hydropower energy. Deep surface drilling is possibly an exciting alternative. Obviously, environmental perspectives must be considered when making decisions on future damming options. But stopping further development of heavy industry is not sensible. By doing so we would be diminishing our possibilities for further employment progression. That is not an option.

Jakob Frímann Magnússon
The Progressive Party

The primary aim of the new Iceland Green Movement is to bring to a 4-year halt all further aluminium smelter commitments and allow the current process of general environmental awakening to come to the surface properly here in Iceland. The general public will soon realise what incredible assets we would be compromising by continuing on the same pathway. We have just completed Kárahnjúkavirkjun, the largest and most controversial undertaking of all times in Iceland, and there is absolutely no need to rush into another giant smelter adventure so soon. In the meantime we have a growing number of international computer giants looking seriously at Iceland for the purpose of utilizing our green energy to run their vast power-consuming activities. This should be taken seriously, partly because this presents a pollution-free alternative to the aluminium industry, but mainly because the prices that can be charged for our green electricity are in this marketplace undoubtedly much higher than the embarrassingly low price the aluminium smelters in Iceland have been getting away with. Universally marketing the general concept of Green Iceland is one of the greatest future business opportunities we have been granted as a nation. Let’s not blow it!

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