OECD Environmental Performance Reviews

1990-0090 (online)
1990-0104 (print)
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OECD Environmental Performance Reviews provide independent assessments of countries’ progress towards their environmental policy objectives. Reviews promote peer learning, enhance government accountability, and provide targeted recommendations aimed at improving environmental performance, individually and collectively. They are supported by a broad range of economic and environmental data, and evidence-based analysis. Each cycle of Environmental Performance Reviews covers all OECD countries and selected partner economies.

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OECD Environmental Performance Reviews: Iceland 2014

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04 Sep 2014
9789264214200 (PDF) ;9789264214095(print)

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This report is the third OECD review of Iceland’s environmental performance. It evaluates progress towards sustainable development and green growth, with a focus on the environmental aspects of Iceland's energy and tourism policies.

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  • Preface

    This third OECD Environmental Performance Review of Iceland shows that the people of Iceland enjoy a very good environmental quality of life, with excellent water quality, low air pollution and easy access to nature. Indeed, one-fifth of the country’s area is under some form of nature protection. Nevertheless, the report argues that the quality of some environmental services, such as waste disposal and wastewater treatment, could be further improved, and calls for additional efforts to achieve Iceland’s green growth objectives.

  • Foreword

    The principal aim of the OECD Environmental Performance Review programme is to help member and selected partner countries improve their individual and collective performance in environmental management by:

  • General notes

    The following signs are used in Figures and Tables:

  • Executive summary

    Iceland has a small, open economy built on plentiful and cheap renewable energy, energy-intensive industry, abundant freshwater, unique natural tourist attractions and fisheries. The people of Iceland enjoy a high standard of living thanks to high income, low inequality and good environmental quality. The severe financial and economic crisis that hit the country in 2008 reduced some pressures on the environment, including use of materials, generation of waste and emissions of greenhouse gases (GHGs). However, these are likely to increase as the economy recovers. The carbon intensity of the economy is very low as hydro and geothermal power covers about 85% of Iceland’s energy needs, a share with no equal among OECD countries. Less than 1% of the land area is artificially built, and about 20% of the country’s area is under some form of nature protection. Groundwater is of excellent quality and does not need treatment before consumption. Emissions of most air pollutants have declined and air quality is generally good in the Reykjavík area, home to one-third of the population.

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  • Expand / Collapse Hide / Show all Abstracts Progress towards sustainable development

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    • Key environmental trends

      Iceland’s population enjoys good environmental quality and a relatively high standard of living. This chapter provides a snapshot of key environmental trends in Iceland over the period since 2000. It highlights some of the country’s main environmental achievements and remaining challenges on the path towards green growth and sustainable development. The chapter describes Iceland’s progress in using energy and natural resources efficiently; in reducing the carbon intensity of its economy; in managing its natural asset base; and in improving its people’s environmental quality of life.

    • Policy-making environment

      Iceland has strengthened its institutional and legislative framework for environmental management in line with its broader environmental agenda. This chapter analyses Iceland’s environmental governance system, including mechanisms for horizontal and vertical co-ordination and for evaluating the environmental impact of sectoral policies. It reviews key environmental and sustainable development initiatives, including the country’s National Strategy for Sustainable Development 2002-2020. It examines the regulatory framework for environmental management and the enforcement and compliance assurance activities. The promotion of environmental democracy is also discussed.

    • Towards green growth

      Part of Iceland’s response to the 2007-09 economic and financial crisis has been an increased emphasis on green growth. This chapter examines the use of taxes and other pricing instruments to pursue environmental objectives and to reduce the impact of production and consumption on the environment. The removal of environmentally harmful subsidies, such as to agriculture and fossil fuels, is also discussed. The chapter examines the public and private investment in environment-related infrastructure and services, as well as the promotion of "green" goods and services and eco-innovation. Finally, Iceland’s efforts to mainstream the environment in development co-operation programmes are reviewed.

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  • Expand / Collapse Hide / Show all Abstracts Progress towards selected environmental objectives

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    • Energy and environment

      Iceland has by far the highest share of renewables in energy supply among OECD countries. After an overview of the country’s energy mix, this chapter examines the environmental impact of the energy sector, including on landscape, water, biodiversity and emissions of greenhouse gases and air pollutants. The energy market and prices, as well as the role of energy-intensive industry, are also discussed. This chapter studies the institutional and policy framework for integrating energy and environment, with a focus on the planning of renewable energy infrastructure. Finally, it reviews the opportunities and obstacles to improve energy efficiency in residential heating, transport and the fishing industry.

    • Tourism and environment

      Tourism is one of Iceland’s fastest growing sectors. Millions of international tourists have visited the country in recent years, many of them drawn by its unique but highly sensitive natural environment. After an overview of the key trends and features of tourism in Iceland, this chapter describes the environmental impact of tourism, including on landscape, flora and fauna. It reviews the institutions and the policy responses put in place to ensure that tourism promotion adequately takes account of environmental concerns. These include financing environment-related infrastructure, promoting green innovation and strengthening the quality of tourism operators.

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