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OECD Environmental Performance Reviews: Iceland 2014

image of OECD Environmental Performance Reviews: Iceland 2014

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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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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