ICELAND:

COOPERATION OPPORTUNITIES IN ARCTIC

Authors:

Rigina Syssoyeva, PhD, National Space Center, Astana,

Kazakhstan;

Aarón Sediles Martínez, MSc student, Bogota, Colombia;

Raúl Silva Aguilera, MSc, Mexico City, Mexico

Oslo 2018

List of abbreviations

AC Arctic Council

EEA European Economic Area

EFTA European Free Trade Association

EEZ Exclusive Economic Zone

GDP Gross Domestic product

GNI Gross National income

OECD Organisation for Economic Cooperation and Development

NATO North Atlantic Treaty Organization

R&D Research and Development

Table of Contents

Abstract ................................................................................................................ 4

1. Introduction .................................................................................................. 4

2. Methodological and theoretical framework .......................................... 6

3. Hypotheses ................................................................................................... 8

4. Main body ..................................................................................................... 8

4.1. Socio-political dimension ....................................................................... 8

4.2. Industrial (energy) dimension ............................................................... 12

4.3. Tourism dimension ................................................................................... 15

Summary suggestions ..................................................................................... 18

References ......................................................................................................... 19

Abstract

The present report is prepared by the students of the course “A Changing Arctic”, who

have backgrounds in international relations and geology. The paper is supposed to be presented

at the city council of Reykjavik, and it is aimed to answer the research question: “How Iceland

should cooperate in order to improve its positions in Arctic?” The report is organized around

cooperation opportunities of this republic in the region; in parallel, it contains an overview of

key facts of its present situation and suggestions on how cooperation can improve it.

1. Introduction In order to understand the importance of cooperation in Arctic, we need to

answer four following introductory questions1:

Why cooperation is vital for Iceland’s development? Iceland is a small country with

population of around 340 thousands people,2 the surface of its land area is a little bit

more than 100 thousand km2,3 and its economy with GDP of 16,7 billion USD is the

smallest one among OECD members.4 Due to small population and territory, Iceland

cannot be a self-sufficient country and heavily depends on trade and imports

(primarily of industrial supplies and consumer goods)5 in order to ensure proper

national development and maintain high-consumption level of its population (with

GNI per capita in 60,830 USD, it is in the 7th place worldwide with regard to that

indicator).6 Cooperation opens wide opportunities for this small island nation in trade,

attraction of tourists, R&D, infrastructure development, etc. – all the spheres that it

cannot develop unilaterally, herewith, it is vital for Iceland to cooperate.

Why it is important for Iceland to cooperate in Arctic? Even if Iceland is a developed

economy, due to its geographic isolation and extremely small population, it is still has

not emerged as a significant actor of international politics. It is not in the front pages

of newspapers and it is rare to hear about this republic in world news. We suppose,

one of the potential reasons of this disappointing reality is that its main arena, in which

it can reach its full potential is still not clearly determined. Arctic can become a solution

for Iceland in this context. Thus, even if Arctic is a big region, its number of players is

1Introductory questions are supposed to prove the necessity of Iceland’s cooperation in the region; they are not the

research questions of the paper. The research question is determined further. 2UN, DESA/POPULATION DIVISION, World Population Prospects 2017,

https://esa.un.org/unpd/wpp/DataQuery/ 3The Central Bank of Iceland, Economy of Iceland – 2016, p. 7, https://www.cb.is/library/Skraarsafn---EN/Economy-

of-Iceland/2016/Economy_of_Iceland_2016.pdf 4In spite of a small size of economy, the only membership of Iceland in the OECD demonstrates that it is a developed

country, as only high-income countries become OECD members. Vid. OECD, Country Classification 2017 – as of 19

July 2017, p. 10, https://www.oecd.org/trade/xcred/2017-Internet-table-2-english-as-of-19-july- 2017.pdf 5The Central Bank of Iceland, Economy of Iceland – 2016, p. 16, op.cit. 6World Bank, Gross national income per capita 2017, Atlas method and PPP,

https://datacatalog.worldbank.org/dataset/gni-capita-ranking-atlas-method-and-ppp-based [Accessed 22-07-2018].

limited and includes mainly the “Arctic Eight” (i.e. Canada, Denmark, Finland,

Iceland, Norway, Russia, Sweden, and the USA).7 Limited number of players gives

Iceland guarantees that its voice will be heard, and a place for maneuver in order to

enhance and keep its positions in the region.

What are the conditions of cooperation in Arctic? Arctic has a developed legal

framework of cooperation, to which its main actors are committed and do not see a

need for its dramatic modifications.8 This framework is based on the UNCLOS

Convention, Polar Code, bilateral agreements as well as international commitments of

the “Arctic Eight”. In the nearest future, the region is most probably will remain being

one of the “untroubled parts of the world”.9 It does not mean that there are no disputes

among states. There are disputes, but Arctic countries are open for dialogue and

negotiation and there is no discernible reason to expect an open conflict in the region.

Sovereignty and sovereign rights of Arctic states are the fundament of cooperation in

the region, and sovereign states are its key players.10 At the same time, there is no a

determined state-leader in Arctic, and as all its state-players prioritize their

sovereignty, there is no a supranational authority that can impose compliance with

common rules and manage governance in the region. The only organization that

hypothetically can play such a role is Arctic Council (AC), but its format is too weak

for carrying this responsibility because AC is only an inter-governmental forum of

high-level officials of its member-states and observers of the Council, it is a “soft-law”

institution and its decisions are not legally binding for participating counties.11

In which spheres cooperation in Arctic is mainly demanded? Primarily, in general

terms, if Iceland wants to increase significance of its politics in the region, it should

pay a comprehensive attention to cooperation in Arctic, which in our opinion, could

be achieved only if Reykjavik uses all its accessible instruments of influence in regional

and national levels. In the regional level, it should use bilateral and multilateral

instruments for improving its positions, while in the national level, it should promote

among its citizens an idea that Arctic is vital for Icelanders. This comprehensive

approach to political advancement we understand as a socio-political dimension of

cooperation. For understanding the specific terms of cooperation, we decided to

determine the drivers of Iceland’s economy because we suppose that the most rational

way to improve positions of the country in Arctic is to simply expand its national

achievements within the region, and compete in those spheres, in which the state is

already highly developed. Thus, among the leading sources of export revenues of

7D.Rothwell, “International Law and Arctic Shipping”, 22 Mich. St. Int'l L., Rev. 67, 2013-2014, p. 71. 8Vid. The Ilulissat Declaration. Arctic Ocean Conference Ilulissat, Greenland, 27 – 29 May 2008. 9R.Tamnes, “Arctic Security and Norway“ in J. Kraska (ed.) Arctic Security in an Age of Climate Change, Cambridge:

Cambridge University Press, p. 62. 10T.Koivurova, P.Kankaanpaa and A.Stepien, “Innovative Environmental Protection: Lessons from the Arctic”,

Journal of Environmental Law, 2015, Volume 27, p. 289. 11Ibid, p. 291.

Iceland’s economy12 are fishing industry (i.e. use of sea living resources), and tourism

services.13 Besides that, the country is well known in the world for its green economy,

as 90% of the energy it produces comes from renewable resources.14 We find that these

spheres of Iceland’s economic drivers (i.e. fishing, tourism, and green energy) can be

used as specific areas for promoting country’s positions in Arctic. As we find that the

energy sector is the most promising one for cooperation of Iceland in Arctic we will

focus on this issue within the industrial (energy) dimension; while tourism as it belongs

to services sector, can be studied under a tourism dimension of cooperation.

Understanding of the framework of these four introductory questions are

reflected in the explanatory research question of the present paper: “How Iceland

should cooperate in order to improve its positions in Arctic?”

2. Methodological and theoretical framework As the paper deals with cooperation phenomena, in theoretical terms, it is

constructed in a neoliberal perspective.15 Within this perception, cooperation

conditions of the region analyzed in the introductory part, indicate that states in Arctic

cooperate under anarchy. According to neoliberal theories, anarchy is an international

system, which main characteristics are “lack of common government”,16 and absence

of a hegemon, an only state, that has enough power to “make and enforce the rules”

of cooperation.17

In order to create a theoretical body of the present paper, we decided to use key

concepts of those authors, who theorize cooperation under anarchy, and for this

particular report, we applied statements by R.Keohane, K.Oye, R.Axelrod and other

authors, who explain relations among countries under anarchy.

Thus, cooperation under anarchy is possible,18 and commonly, its rules are

negotiated.19 The most problematic aspect of cooperation under anarchy (as there is no

an enforcement body) is uncertainty in partners’ compliance with norms agreed

through negotiations.20 In order to alleviate this negative effect, states should create a

12Among the drivers of Iceland’s economy there is also the aluminium industry, but as it is not directly related to

Arctic, we did not cover it in this report. 13The Central Bank of Iceland, Economy of Iceland – 2016, p. 14, op.cit. 14Ibid, p. 18. 15Realist/neorealist approaches are focused on explanation of conflicts, while liberal/neoliberal theories are better

for understanding cooperation. Vid. K. Keil, “The Arctic: A new region of conflict? The case of oil and gas”,

Cooperation and Conflict, Volume 49(2), p. 164 and S.Walt, “International Relations: One World, Many Theories”,

Foreign Policy, No. 110, Special Edition: Frontiers of Knowledge, Spring 1998, pp. 29-30. 16R. Axelrod and R. Keohane, “Achieving cooperation under anarchy: strategies and institutions” in K.Oye (ed.)

Cooperation under Anarchy, Princeton University Press, New Jersey, 1986, p. 226. 17R. Keohane, “After Hegemony Cooperation is Still Possible”, The International Spectator, Volume 50:4, p. 92. 18K. Oye, “Explaining cooperation under anarchy: hypotheses and strategies” in K.Oye (ed.) Cooperation under

Anarchy, Princeton University Press, New Jersey, 1986, p. 1. 19H. Milner, “Review: International Theories of Cooperation among Nations: Strengths and Weaknesses”, World

Politics, Vol. 44, No. 3, April 1992, p. 469. 20K. Oye, “Explaining cooperation under anarchy: hypotheses and strategies”, op,cit., p. 1.

system of “complex interdependence” among them. It means that countries should be

linked to each other and interdependent not in one sphere, but in many spheres,

establishing herewith a complex of various links and interconnections, which makes

any betray in one sphere unprofitable and disadvantageous because this betray may

cause losses in other interdependent fields. Complex interdependence can be achieved

via bilateral and multilateral (i.e. via international organizations) channels.21 For this

phenomena, “domestic-international linkages” are found common. They occur when

external politics of a state have direct effect on its internal politics; or when politicians

use processes in international arena as instruments to promote their political

preferences in internal domestic level.22

Another way to increase credibility of cooperation is to develop it under

“shadow of the future”,23 which makes it more credible and stable because countries

become more reliable with those partners, with whom they know that they will

cooperate for long time in the future.24 In other words, shadow of the future means

confidence in continuous partnership, when developing relations states are guided by

long-term cooperation.

These theoretical statements will be applied at the main body of the paper. As

it is understandable from the introduction, three dimensions of cooperation in Arctic

will be studied – socio-political, industrial and tourism.

For socio-political dimension, such terms as complex interdependence achieved

through bilateral and multilateral ways and domestic-international linkages will be

applied. Besides that, as the dimension deals with society, constructivist assumptions

on citizens’ identities will be also analyzed. For this sphere, it is particularly important

to study identities because if to believe to constructivists identities influence national

priorities as well as cooperation-related decisions.25

For industrial dimension, shadow of the future concept will be applied. In this

part, we will describe how green energy can become a driver of Icelandic future

development.

In tourism dimension, shadow of the future concept will be applied. In our

opinion, tourist “shadow of the future” of Iceland consists of the importance of tourism

for Iceland, the uniqueness of Icelandic landscape, its challenges, sustainable approach

21R. Keohane, J. Nye, “Review: Power and Interdependence Revisited”, International Organization, Volume 41, No.

4, Autumn, 1987, p. 731 and K. Keil, “The Arctic: A new region of conflict? The case of oil and gas”, Cooperation and

Conflict, Volume 49(2), p. 165. 22 R. Axelrod and R. Keohane, “Achieving cooperation under Anarchy: strategies and institutions” in K.Oye (ed.)

Cooperation under Anarchy, Princeton University Press, New Jersey, 1986, p. 242. 23K. Keil, “The Arctic: A new region of conflict? The case of oil and gas”, Cooperation and Conflict, Volume 49(2), p.

165. 24J. Fearo, “Bargaining, Enforcement, and International Cooperation”, International Organization, Volume 52, No. 2,

Spring 1998, p. 270. 25K. Keil, “The Arctic: A new region of conflict? The case of oil and gas”, op.cit., p. 162.

and the Icelandic way of developing tourism in Arctic. We choose these “components”

of the shadow of the future because they have biggest long-term cooperation

significance.

3. Hypotheses In the present paper, we suppose to test three following hypotheses (H) related

to three cooperation dimensions:

H1 – In order to become an indispensable partner in Arctic, Iceland should

develop complex interdependence with its regional partners via bilateral/multilateral

instruments and common identity.

H2 – If Iceland will become a “green energy leader” in Arctic, it can use this

leadership to develop its internal infrastructure and other external cooperation

opportunities.

H3 – The way Iceland should cooperate in Arctic regarding tourism should be

through a) the creation of “bridges” with the Arctic tourist destinations and b) the

removal of the isolation perception of Iceland.

4. Main body

4.1. Socio-political dimension The idea of this part is to start with society-related issue (identity-related, as it

mentioned in the theoretical framework), then to pass to some internal issues (within

understanding the domestic-international linkage) and finish with politics understood

in terms of complex interdependence.

Concerning identity, Iceland’s geopolitical identity is still not determined.26 The

country is balancing between European, Northern Atlantic, Northern American,

Northern European and Arctic identities. European identity – because Iceland is a

member of the European Economic Area (EEA) since mid-1990s, it is within the

Schengen zone and has an access to the labor market of the EU.27 However, even if EU

is the main trade partner of Iceland, which accounts for more than 70% of export, and

more than 60% of import of the republic,28 it is unlikely that in foreseeable future the

republic joins the Union because it is not beneficiary for Reykjavik to join the EU’s

26M.Bennett, “Can Iceland establish itself as an Arctic coastal nation?”, Anchorage Daily News, October 2012,

https://www.adn.com/arctic/article/can-iceland-establish-itself-arctic-coastal-nation/2012/10/13/ 27Eurobarometer, Iceland and the European Union, 2011, p. 7,

http://ec.europa.eu/commfrontoffice/publicopinion/flash/fl_302_sum_en.pdf 28Statistics Iceland, Iceland in facts – 2017, p. 23, https://www.statice.is/publications/publication-detail?id=58287

Common Fisheries Policy.29 Public opinion is also against EU membership.30 North

Atlantic identity – because its mainland is situated in the North Atlantic Ocean.

Northern European identity – because it shares with other Scandinavian states its

“Viking past”.31 Country is close also to the North America continent because and it

has strong cultural connections with Canada, where live more than 100 000 of

descenders of Icelanders,32 who settled in the Northern Canada more than 1000 years

ago.33 As for Arctic identity, even if the mainland of Iceland is in the North Atlantic, it

is considered as an Arctic country because of its small island called Grímsey situated

in latitude 66˚32ˊN, which is within the Arctic Circle.34

However, even if Iceland shares different identities in geopolitical terms, its

primarily society identity, as public opinion surveys show, is Nordic.35 Even so,

nowadays, politicians try to impose Arctic identity on Icelanders, and the reason why

it happens represents an example of domestic-international linkages. The case is that

currently, Iceland tries to increase its geostrategic importance and looks for its place in

a “future Great Game” of world powers. During the Cold War, Iceland already

enjoyed such a geostrategic position being an important American ally; but with the

end of the War, it lost this position, which was symbolically demonstrated by the USA

through unilateral withdrawal of its military base from the country.36

In this situation, the most promising arena for increasing the geostrategic

importance of the country is obviously Arctic. Reykjavik tries to convince both national

and international audiences that Iceland is an important Arctic player. On the national

level, politicians through public speeches, try that Icelanders “become” Arctic

emphasizing an Arctic spirit and an Arctic character of citizens of the country, which

are shaped by a unique geographical position of Iceland and uniqueness of its nature

and climate conditions37 (explained in the “tourism dimension” part). On the

international level, Reykjavik struggles for full-fledged status of an Arctic state, and

the fact that it is not a coastal state does not deter it. Moreover, Iceland tries to convince

its Arctic partners and international community that it is an Arctic coastal state, which

29S.Weber, “Iceland and EU membership”, European View, Volume 9, 2010, p. 285. 30Eurobarometer, Iceland and the European Union, op.cit., p. 4. 31I.Medby, Peopling the State: Arctic State Identity in Norway, Iceland, and Canada, Doctoral thesis, Durham University,

UK, 2017, p. 131, http://etheses.dur.ac.uk/12009/ 32Statisctics Canada, Census Profile 2016, http://www12.statcan.gc.ca/census-recensement/2016 33Canadian Encyclopedia, Icelandic Canadians, https://www.thecanadianencyclopedia.ca/en/article/icelanders/ 34L.Angélique de La Fayette, “Oceans Governance in the Arctic”, The International Journal of Marine and Coastal Law,

Volume 23, 2008, p. 533 and D.Keith and E. Jones, “Grímsey, North Iceland”, The Geographical Journal, Vol. 86, No.

2, August 1935, p. 143. 35Eurobarometer, Iceland and the European Union, 2011, p. 10,

http://ec.europa.eu/commfrontoffice/publicopinion/flash/fl_302_sum_en.pdf 36V.Ingimundarson, Iceland's Post-American Security Policy, Russian Geopolitics and the Arctic Question, The

RUSI Journal, Volume 154, Number 4, p. 74. 37I.Medby, Peopling the State: Arctic State Identity in Norway, Iceland, and Canada, Durham theses, Durham University,

2016, p. 117, http://etheses.dur.ac.uk/12009/117

is among the priority tasks of its Arctic strategy, last time revised in 2016.38 The basic

argument for this is that even if Iceland does not have a coast in Arctic Ocean, its EEZ

is extended to the Greenland Sea as a part of the Arctic Ocean, which makes it a coastal

state.39

Adoption of Arctic identity will make Iceland closer to its Arctic partners,

especially to Russia, Canada and Denmark, for whom Arctic identity represents

particular importance. It will also make it socially closer to Norway, for whom Arctic

identity is important but to a lesser extent than to Russia, Canada and Denmark.40 As

for Finland and Sweden, for them European identity is much more important than the

Arctic one (85% and 88% subsequently in these countries feel themselves European).41

Concerning the USA citizens, they have never felt themselves as an Arctic nation.42

Arctic identity is not only a question of internal development, as it was

mentioned in the theoretical framework, constructivists says that identities influence

national priorities and external policy decisions. In this regard, we suggest that

Iceland, if it wants to play a more important role, it should promote its Arctic identity.

However, it seems us impossible that Arctic identity can replace the Nordic identity of

Icelanders, for this reason, our suggestion is that Reykjavik should promote a joint

Nordic/Arctic identity.

Identity is not the only thing that unites and may unite Iceland with its Arctic

partners. The country has strong multilateral and bilateral links with A8. Thus,

membership at EEA creates an institutional framework for its cooperation with

Denmark, Sweden and Finland. Membership at EFTA contributes to its links with

Norway.43 Being a party of the Barents Euro-Arctic Council favors cooperation with

Denmark, Finland, Norway, Russia, Sweden,44 while membership at NATO makes it

closer to the USA, Canada, Denmark, and Norway.45

Arctic itself has a significant institutional framework. Besides the Arctic

Council, which institutionalize cooperation among eight Arctic countries and in which

Iceland will chair from 2019 to 2021,46 A8 (plus EU parliament) also meets on the

38A.Karlsdóttir and L.Harbo, Nordic Arctic Strategies in Overview, Nordregio Policy Brief, January 2017, pp. 2-3,

https://www.diva-portal.org/smash/get/diva2:1071726/FULLTEXT01.pdf 39K.Dodds and V.Ingimundarson, “Territorial nationalism and Arctic geopolitics: Iceland as an Arctic coastal state”,

The Polar Journal, Volume 2, Number 1, p. 25. 40K. Keil, “The Arctic: A new region of conflict? The case of oil and gas”, op.cit., p. 179. 41Eurobarometer, “Future of Europe”, Volume 71, p. 35,

http://ec.europa.eu/commfrontoffice/publicopinion/archives/eb/eb71/eb713_future_europe.pdf 42K. Keil, “The Arctic: A new region of conflict? The case of oil and gas”, op.cit, p. 172. 43Guide to Iceland, “International Relations of Iceland”, https://guidetoiceland.is/history-culture/international-

relations-of-iceland 44Barents Euro-Arctic Council, Members of the Barents Euro-Arctic Council and the Barents Regional Council,

https://www.barentscooperation.org/en/About/Members 45NATO, NATO member countries, https://www.nato.int/cps/ie/natohq/nato_countries.htm 46Government Offices of Iceland, The Arctic Region, https://www.government.is/topics/foreign-affairs/arctic-

region/

Conference of Parliamentarians of the Arctic Region.47 However, even if Iceland

actively participates in these institutions, as it is not officially recognized as a coastal

state, it is excluded from A5 meetings, as it was in 2008, when five coastal states signed

the Ilulissat Declaration, in which they gave to non-coastal states the “status of “other

users” of the Arctic Ocean.48

Concerning state-to-state cooperation, Iceland maintains bilateral relations and

has diplomatic missions in all Arctic states.49 In terms of trade, among top-ten

importers to Iceland, there are Norway, the USA, Denmark and Sweden; as for

Icelandic export, among Arctic states, among top-ten countries, to whom it sell its

goods, there are the USA, Norway and Denmark.50

All this information stated above to some extent is related to complex

interdependence. For understanding the complexity of Socio-political dimension of

cooperation in Arctic, we decided to summarize it in the table below (figure 1).

Figure 1. Iceland’s complex interdependence with Arctic countries

Complex

interdependence

link

Arctic partners

Sweden Denmark USA Canada Russia Finland Norway

Arctic

institutions

Arctic Council + + + + + + +

Conference of

Parliamentarians

of the Arctic

Region

+ + + + + + +

A5 meeting* - - - - -

Other

multilateral

institutions

NATO + + + +

EEA + + +

EFTA +

Barents Euro-

Arctic Council

+ + + + +

Bilateral

relations

Diplomatic

relations/missions

+ + + + + + +

Trade:

export/import

/+ +/+ +/+ +/+

Arctic identity** ++ ++ ++ +

47Conference of Parliamentarians of the Arctic Region, “About”, http://www.arcticparl.org/about.aspx 48K.Dodds and V.Ingimundarson, “Territorial nationalism and Arctic geopolitics: Iceland as an Arctic coastal state”,

op.cit., pp. 24-26. 49Government Offices of Iceland, https://www.government.is/ministries/ministry-for-foreign-affairs/diplomatic-

missions/ 50UNCTAD Comtrade database, https://comtrade.un.org/data/

*In this graph, symbol “-“ means that A5 are interdependent, but Iceland is not interdependent with

them.

**In this graph, “++” means high importance of Arctic identity, symbol “+” means general importance.

Source: prepared by the authors.

Analysis of the figure 1 demonstrates that Iceland is interdependent with all

Arctic states, and mostly with Norway and Denmark. However, there are still margins

to improve by enlarging trade relations or becoming a part of A5 club. In this regards,

we suggest that in order to become indispensable in the Arctic region, Iceland should

build a strong of complex interdependence with its Arctic partners.

4.2. Industrial (energy) dimension We consider that clean energy as the driver of an Icelandic future.

In the current state of grout and raise after the economic crisis in 2008-2009, and

taking into account the need for clean sources by other countries for their sustainable

development, Iceland has the opportunity to establish its position in the euro-arctic

region as the leader in energy production systems in a cooperative framework with

the Arctic states that would permit the implementation of an integrated energetic

infrastructure for the assessment of future challenges on energy consumption in the

region and receive back the collaborative retribution of the other countries.

Iceland has a privileged location between the Arctic and North Atlantic seas,

that at some extent can be understood as a connecting central point for the interaction

among countries, furthermore, Icelandic specially active volcanic environment, makes

it one of the best regions of the world for the production of geothermal energy, its

location between the wind currents, give also Iceland the possibility to successfully

engage in the wind energy production field with. This conjunction between energetic

potential and strategic location, together with the current state of change in the ice-

covered areas in the arctic, make a perfect scenario for an integrated energy network

based in Iceland.

Despite not being completely located into the Arctic Circle, Iceland has a

position as a member of the 8 states in the Arctic council51. Between the goals of the

Sustainable Development working group52, Iceland, for its natural and current

industrial conditions, could excel as the leader of the cooperative group of nations in

the achievement of goals 7, 9, 11,12 and 17 for “Affordable and clean energy”,

“industry innovation and infrastructure”, “sustainable cities and communities”,

“responsible consumption and production” and “partnership for the goals”; using the

huge Icelandic geothermal and wind energy generation potential, as the main driving

force. The construction of a network in which Iceland is the main provider of clean

51 Lecture notes: A changing arctic course. 52UN, United National sustainability goals, https://www.sdwg.org/activities/un-sustainable-development-goals/

energy and expertise, would consolidate its geopolitical position as a key actor in the

Arctic region and even establish the country as a reference spot for Observer countries

such as China that consider essential the development of geothermal energy to meet

the needs of energy consumption and relieve air pollution53 and the UK from which a

regional network of energy distribution could incorporate Icelandic energy with the

rest of Europe, Africa and the Middle East system (See figure 2).

Once consolidated the position of Iceland as the energy leader in the region, as

a counterpart, the building of multilateral schemes should be the next step, in which

all the other countries contribute back to Iceland in the development of all the other

industrial affairs, such as shipping from the Norwegian experienced point of view,

and even in the scientific research dimension, that could make an impact in the

understanding of other natural resources for the country such as fish distribution in

the current state of change in the arctic waters, where displacement of warmer fish

species has been observer to northern parts of the Arctic54, or the connection of

Icelandic waters with west Europe basing trough the Iceland Scotland Overflow

Water55, which could have impact in the distribution of nutrients and consequently in

the living resources. All of these projects, can be better achieved in a cooperative

framework of mutual benefit in a win win situation in which each country gets to

benefit from its own possibilities and experience, for the case of Iceland it is proposed

that the main effort should be in consolidating its presence in the arctic and north

Atlantic as the main producer of energy and knowledge, to build a reliable dependence

by the other countries in order to receive contributions in the different industrial

affairs.

It has been proposed the Idea of pushing further in the development of clean

energy solutions to consolidate Iceland position In the Arctic. That’s why the actual

clean energy potential of Iceland must be demonstrated through case studies.

It has been shown in the “Improved Forecast of Wind, Waves and Icing”

(IceWind) project that Iceland wind power is between the highest wind power class

described by the European Wind Atlas (does not include Iceland)56 which is

determined to be in Ireland and Scotland. Wind power is clearly one of the best

options, due to is low environmental impact and high potential in Iceland.

53J.Hou, Cao, M., & Liu, P, “Development and utilization of geothermal energy in China: Current practices and

future strategies. Renewable Energy, 125, 2018, pp. 401-412. 54Lecture notes: A changing arctic course. 55S. Zou, Lozier, S., Zenk, W., Bower, A., & Johns, W., “Observed and modeled pathways of the Iceland Scotland

Overflow Water in the eastern North Atlantic”, Progress in Oceanography, 159, 2017, pp. 211-222 and Fleischmann,

Uli, et al. "Transport of newly ventilated deep water from the Iceland Basin to the Westeuropean Basin." Deep Sea

Research Part I: Oceanographic Research Papers, Volume 48.8, 2001, pp.1793-1819. 56N.Nawri, et al, “The wind energy potential of Iceland”, Renewable Energy, 2014, vol. 69, p. 290-299.

The combination of wind energy projects with Geothermal energy could give

the necessary production to contribute in the proposed regional cooperative project of

energy transmission from Iceland. Another advantageous opportunity for Iceland is

the concept of deep drilling project, which gives the possibility of accessing hotter

waters than conventional drill sites for geothermal generation, giving outcomes of one

order of magnitude bigger57.

The possibility of becoming the top energy producer in an Euro-Arctic

integrated cooperative network gives Iceland the opportunity of consolidating itself as

a dependable state, but not only it is possible to give energy itself but provide the

exchange of Knowle to help in the development of clean energy projects for other

member and observer states of the Arctic council such as China that currently is

developing The 13th five-year plan for geothermal energy development and utilization (2016-

2020)58 or Russia that has being long interested in the development of geothermal

projects59 as an option for a transition to low carbon energy system, being geothermics

the system with more technical potential60.

Cooperation between Iceland and countries of the AC in energy matters has

been undertaken already, that is the case of Canada that in 2016 stablished an

agreement to launch research projects to foster development of sustainable energy for

communities and industrial projects in northern regions and increase the economic

competitiveness of both nations, understanding that “As an Arctic territory that's more

accessible than Quebec, Iceland is a veritable open-air laboratory in these research

fields. Numerous other subjects linked to energy will emerge from this

collaboration”61.

The positioning of Iceland as the leader for energy production and knowledge

distributer in that matter, has implications in the general development of the country,

the revenue and income from energy distributed outside the country, could be used to

invest in other projects such as the improvement of the transport infrastructure inside

the country, the maintenance of a good educative system and the funding of science

and technology projects that could impulse the country even further. This

improvement of the complete spectrum of the industry transport and infrastructure of

57G.Friðleifsson, Elders, W. and Albertsson, A., “The concept of the Iceland deep drilling project”, Geothermics,

2014, vol. 49, p. 2-8. 58 Notice of the National Development and Reform Commission on Printing and Distributing the 13th Five-Year

Plan for Renewable http://www.nea.gov.cn/2016-12/19/c_135916140.html 59V.Kononov, “Utilization of geothermal energy in Russia”, Geothermics, 1992, vol. 21, no 5-6, p. 617-622. 60M.Sharmina, “Low-carbon scenarios for Russia's energy system: A participative backcasting approach”, Energy

Policy, 2017, vol. 104, p. 303-315 Table 5. 61Institut national de la recherche scientifique - INRS; signature of a quebec-iceland agreement to stimulate

development of sustainable energy. (2016, Nov 06). NewsRx Health & Science, https://search-proquest-

com.ezproxy-test.uio.no/docview/1832791153?accountid=14699

the country would be the main objective that could be achieved based in the ground

provided by clean energy. Certain challenges would need to be addressed from the

construction of the energetic infrastructure itself, to other issues not so intuitive such

as the likelihood of tourist not wanting to go to areas where energetic transmission

lines are present and altering the famous Icelandic landscape62.

Source: DESERTEC EUMENA project63

Herewith, we consider that Iceland is a paradigmatic example of gaining energy

independence and decarbonizing the power sector while meeting its growing

demand”64 its access to clean and reliable energy sources, together with the current

state of recovery and the economic growth given by other sectors like tourism, mineral

resources, and fisheries, could give impulse to the rise of Iceland as the coordinating

leader of multinational projects for the development of an integrated energetic

infrastructure and cooperation framework to provide the Euro-Arctic region with the

needed energy for the future and give the opportunity to shift toward a more

sustainable and green development in the region.

4.3. Tourism dimension

As it was mentioned in the methodological and theoretical framework, tourism

“shadow of the future” of Iceland in our opinion consists of the importance of tourism

62P.Stefánsson, Þorkell; Hall, C., “When tourists meet transmission lines: The effects of electric transmission lines

on tourism in Iceland”, Energy Research & Social Science, 2017, vol. 34, p. 82-92. 63DESERTEC Foundation, DESERTEC EUMENA project, https://creativecommons.org/licenses/by-sa/2.5 64P.Duenas, Ramos, A., Tapia-Ahumada, K., Olmos, L., Rivier, M., & Pérez-Arriaga, J. I., “Security of supply in a

carbon-free electric power system: The case of Iceland”, Applied Energy, Volume 212, 2018, pp. 443-454.

for Iceland, the uniqueness of Icelandic landscape, its challenges, sustainability and

Icelandic way of developing tourism in Arctic. All these “components” of the shadow

of the future are explained below.

Before proceeding to components of the shadow of the future, we need to

understand if Iceland tourism meets “Arctic criteria”. The question whether Iceland

can be considered as an Arctic region or not is still a controversy. There are three

definitions of what Arctic is: a) Arctic circle: The Arctic is the region above the Arctic

Circle, which is an imaginary line at around 66° 34' N. The Arctic Circle is the latitude

above which the sun does not set on summer, and does not rise on winter; b) Treeline:

The Arctic is located within a region delimited by the “treeline”, which is the limit of

the space in which trees can develop and c) Isotherm: An isotherm is a curve which

represent points with the same temperature65. Arctic includes any location in high

latitudes where the average daily summer temperature is not higher than 10 °C.

Iceland satisfies the Arctic circle’s definition since the Island Grimsey crosses

this line, however Iceland as a country would be considered as Arctic, not Iceland the

island. On the other hand, over half of Iceland is above the isotherm line, therefore

Iceland is Arctic under the isotherm definition.

There are two main branches of tourism: culture and nature tourism. In Iceland,

nature is the most important segment of the tourist industry and attracts most foreign

visitors. According to the Icelandic Tourist Board (2005), the majority of the visitors

(76%) go to Iceland to experience nature.66 Therefore, it makes sense to focus attention

on the development of nature tourism and speak about components of tourist shadow

of the future in terms of nature.

Importance of tourism for Iceland. There are several examples of countries in

which tourism has been a driver of economy, creator of jobs and development.

Actually, during the twentieth century, tourism has been one of the fastest growing

economic sectors worldwide.67 In the case of Iceland, compared with the global

growth, tourism expanded more rapidly in recent years to become one of the central

sectors of the national economy.68

The uniqueness of Icelandic landscape. Nature is definitely the basis of tourism

in Iceland. The particular landscape of Iceland begins with the fact that its territory is

located in a Mid-Ocean Ridge, a place where new oceanic crust is being formed. This

65A Changing Arctic course, presentation “Arctic Ocean”, week 1. 66Icelandic Tourist Board, Survey among foreign visitors, 2004, http://www.ferdamalastofa.is/konn vetur0405

vefur/index.html 67G.Jóhannesson, Huijbens, E. H, “Tourism in times of crisis: exploring the discourse of tourism development in

Iceland,“ Current Issues in Tourism, 2010, Volume 13(5), 419-434. 68 Ibid.

fact, along with the climate, are the main drivers of the Icelandic landscape. We could

divide the Icelandic landscape in four main groups: solid earth (rocks, minerals,

mountains), water (ocean, lakes and rivers), ice (glaciers) and fire (geysers and hot

springs). This landscape diversity is what gives Iceland a privilege regarding nature

tourism and advantage in developing its tourist sector.

Challenges. The current challenges in Iceland tourism are the tourist industry

competition with other intensive land users for its resources, for example with hydro

and geothermal power production, patterns of seasonality and high concentration of

tourists at few attractions that puts pressure on environment.69 Other aspects that

make Iceland nature vulnerable for tourism is vulnerability of the most widespread

plant communities and the susceptibility of Icelandic soils (mainly volcanic) to

erosion70.

Sustainability of Icelandic tourism. We think that Icelandic tourism

perspective should be sustainable and include environmental education programs

oriented to sustainable development, climate change and specially, the changing

Arctic. Some visible features of sustainability can be used to invite tourist to reflection,

for example the melting of glaciers through years. The situation of polar bears in

Iceland can also be included as part of the narrative. Although polar bears are not

native to Iceland, polar bears often arrive to Iceland, most drifting in on icebergs from

the east coast of Greenland. However, it’s been seen that as global warming is

increasing, the occurrence of this animals arriving to Iceland is becoming more

frequent and there is a probable correlation with the fact that they might be looking

for food71. This reflect a connectivity and closeness of Iceland and the Arctic, but also

reflect the change of the environment, feature that can be used in the “A changing

Arctic” topic of the environmental education agenda that we propose.

Even if tourism is one of the best ways of Iceland to improve their economy, it’s

fundamental to keep in mind the concept of “tourism carrying capacity”: maximum

number of visitors that can be in an area without unacceptable alteration in the

physical environment72. This, in order to be congruent with the proposed sustainable

tourism focus and to conserve the landscapes as much “unspoiled” as possible.

69A.Sæþórsdóttir, “Planning nature tourism in Iceland based on tourist attitudes,“ Tourism geographies, Volume

12(1), 2010, pp. 25-52. 70G.Gisladottir, “The impact of tourist trampling on Icelandic Andosols”, Zeitschrift f¨ur Geomorphologie (Suppl.),

Volume 143, 2005, pp. 55–73. 71Icelandic Institute of Natural History, Polar bears in Iceland, 2010, http://en.ni.is/zoology/mammals/polar-

bears/index.html 72A.Mathieson, and Wall G, Tourism:Economic,Physical and Social Impacts, NewYork: Longman, 1982.

The establishment of a sustainable tourism can attract attention of the members

of the Arctic states to cooperate through tourism, those who through several

mechanisms, are committed with environmental protection of the Arctic region.

Icelandic way of developing tourism in Arctic. The importance of cooperation

of Iceland in the Arctic has been mentioned previously. In order to take maximum

advantages from this cooperation, in our opinion, Iceland should build “bridges”

between the Arctic destinations and remove an isolate perception of the country.

Therefore, is necessary to create a link between Arctic and Iceland in the tourists

perception. Even though Iceland only satisfy two of the three definitions of Arctic, this

is enough to create a tourism narrative in which at least a relationship with the Arctic

is mentioned. The mains resource that Iceland can use is its “wilderness”. The concept

of wilderness has been associated with high latitude and polar regions73 and is

significant for both cultural and natural heritage management and conservation. The

wilderness of Iceland is based in its diverse and dynamic landscape. The country is

often promoted as ‘Europe’s last wilderness,’ by the tourism industry.74 Also, the

marketing slogans which have played a main role in tourism industry, extensively

make use of the wilderness concept: e.g. ‘Iceland naturally,’ ‘Nature the Way Nature

Made It’ and ‘Pure, Natural, Unspoiled’. Since our main suggestion is the creation of

a link of Iceland with the Arctic, we propose the slogan “Iceland: the doors to the

Arctic”. This slogan and its representation should keep the original concept of

wilderness but it should include the concept of the Icelandic connection with the

Arctic.

Herewith, in tourism dimension of cooperation, we suggest that Iceland should

create “bridges” between the Arctic destinations, remove isolate perception of Iceland,

and the doors to sustainable tourism in the Arctic.

Summary suggestions

Within the present report, we covered such areas as:

- society, national governance and politics (within the socio-political

dimension);

- energy (within the industrial dimension);

- climate, nature, tourism (within the tourist dimension).

73A.Sæþórsdóttir, Hall, C. M., and Saarinen, J., “Making wilderness: Tourism and the history of the wilderness idea

in Iceland,“ Polar Geography, Volume 34(4), 249-273. 74 Ibid.

In the summary, we would like to highlight and make clearer our suggestions

and proposals how Iceland should cooperate in order to improve its positions in

Arctic.75

These are our suggestions:

In socio-political dimension, in order to become indispensable in the Arctic

region, Iceland should develop Nordic/Arctic national identity of Icelanders, and

should build a strong of complex interdependence with its Arctic partners.

In industrial (energy) dimension, we suggest that Iceland has potential to

become a “green energy leader” in Arctic and use this leadership as an instrument for

internal development and enlargement of cooperation opportunities with other

countries.

In tourism dimension, Iceland should create “bridges” between the Arctic

destinations, remove isolate perception of Iceland, and the doors to sustainable

tourism the Arctic.

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