Lessons for Iceland’s climate future
This summer, Alþingi hit the emergency brake on a fish fight. After days of bitter exchanges over a bill to reform the quota system, the Speaker used one of the constitution’s rarest powers to cut off the longest parliamentary debate in Icelandic history. Conservative opposition MPs erupted. In Icelandic politics, it was about as dramatic as it gets, and it holds crucial lessons for how we handle today’s environmental crises.
Fishing rights are among the country’s most valuable and contested resources, and the quota system that governs them remains deeply controversial. Introduced in 1984 following emergency measures from the ‘cod wars’, the Individual Transferable Quota system became fully transferable by 1990, stopping the collapse of fish stocks and turning Iceland into a global model for sustainable fisheries. As the international organisation the Environmental Defense Fund notes, the fishing quotas aligned economic incentives with the health of fish stocks. The fish came back. The industry recovered. The environmental goal was achieved.
The trouble came when the quotas became fully tradable. Over decades they consolidated in the hands of a small number of large companies. Now, for example, Brim controls roughly 10 percent and Samherji 9 percent.
Supporters of the system call this efficiency. “The quota system has proven its worth,” argues Heiðrún Lind Marteinsdóttir, CEO of Fisheries Iceland. Critics see a different story entirely. “The quota system has ruined once thriving communities across the country,” says Inga Sæland, Minister of Social Affairs and Housing. “It has handed vast sums to a few vessel owners at the public’s expense.” These are the ‘quota kings’ who now control a public resource while local economies wither.
Did we get it wrong? Not exactly. We faced an urgent environmental crisis. Fish stocks were collapsing and an important national industry was dying. But in our rush to save the cod, we created different problems, ones that still divide the country today. The quota system shows how market-based environmental policies can increase inequality.
It’s no surprise that much of Iceland’s environmental left is deeply sceptical of market-based approaches. The quota system is their proof that treating a natural resource like private property may save it ecologically but can gut the communities built around it.
But there is another way. Instead of rejecting all market solutions, we can focus on making them actually work for everyone. I’ve always been more at home in vegetarian co-ops full of unwashed hippies (shout out to Oberlin College). But here in Iceland, in those rooms, I might as well be Margaret Thatcher (shout out to Margaret Thatcher’s corpse). All too often, simply raising the idea that markets might be part of the solution is enough to mark someone as a suspected tool of the capitalist machine.
We can’t afford this kind of ideological purity with catastrophe looming. Iceland is facing its next existential environmental challenge, and it makes the fishing debates look small. This time, we have abundant renewable power, geology that can store carbon for millennia, and a growing climate technology sector. The world needs what Iceland has, and investors know it. That’s the opportunity. The risk is that we repeat the same pattern, only this time with “carbon kings” and “energy barons” holding the rights to resources that belong to all Icelanders.
Climate policy is even more complex than fisheries management. The quota fight involved one industry contained within Iceland. Climate policy involves energy, industry, carbon trading, and foreign investment. It moves faster, involves vastly more capital, and will be much harder to undo if the ownership structures are wrong.
The scale is also far bigger. The total value of the fishing catch in 2024 was 171 billion kronur. The climate transition will be worth trillions. The players are different too. We’re not talking about local boat owners and fish processors. Now it’s multinational corporations, commodity traders, and international funds. When a carbon project fails here, it makes news around the world.
We can avoid the mistakes of the quota era. Social protections can be built in from the start. We can genuinely listen to the communities affected by these policies and investments. In Iceland, it’s easy to believe that knowing someone’s cousin counts as consultation. It doesn’t.
The urgency of climate change can push governments to act first and fix later. The quota system shows that “fix later” often never arrives. Environmental wins that ignore social consequences can plant the seeds of political backlash that threaten the very goals they were meant to serve.
This isn’t a call to slow down our response to climate change. It’s a call to be deliberate and learn from our history. Iceland should be able to help the world decarbonise, while also securing prosperity for all Icelanders, not just those who hold the contracts.
In the 1980s, the choice was simple: change how we fish or watch the cod collapse. Today’s choice is bigger: change how we produce and use energy or watch the climate collapse. This time we also get to choose who benefits.
We saved the fish but forgot the fishermen. If we save the planet and forget the people, we will have learned nothing.
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