The measures to reach the targets include carbon tax, changes in the taxation level on cars and fuel, improving public transport, the use of biofuels in the fishing fleet, more forest regeneration and restoration of wetlands. Large-scale industry, which has been a growth area in Iceland, will become part of the European Union Emissions Trading Scheme from 2013.

According to the plan carbon sequestration, through forest regeneration and cultivation of land, will be the single most effective factor, but there is also a call for a significant reduction in emissions from traffic, fisheries and agriculture.

A nation of large consumers

Iceland's ecological footprint is big considering how small the country is. Recently a young man, Sigurður Eyberg, attracted a great deal of attention with his Masters' dissertation in Environment and Natural Resources Studies. This showed that Iceland, according to the Global Footprint Network index, has the largest ecological footprint in the world, 56 hectares per person. According to this, Icelanders must be the most resource-demanding consumers in the world. This may not be entirely accurate, because a measurement like this is based on population figures and can produce unfortunate results for a small population spread across a vast country.

Abundance of environmentally-friendly energy sources

Iceland has several distinctive features in this area. The country has its own natural energy sources, waterfalls, and geothermal heat, which means that heating houses causes very little pollution. The country has, of course, very few inhabitants, so by global standards we are not talking about large numbers: 4.6 million tons of greenhouse gases. This is equivalent to 0.01 per cent of global emissions.

The obligations the country has in regard to the climate convention are based on 1990 levels, and that year Iceland emitted 3.4 million tons of greenhouse gases. In the period between 1990 and 2009 emissions increased by 35 per cent, with the largest increase definitely coming from the aluminium industry (142%) and road traffic (69%). Iceland's Environment Agency predicts that the country will live up to its obligations under the Kyoto agreement, even though Iceland received dispensation of 1.2 million tons because of new large-scale industry.

A nation of cars and aluminium

Icelanders are car and aluminium people. It is difficult to see how it will be possible to reduce emissions from the smelting works unless new technology is developed. The emissions increased considerably when the gigantic smelting works Alcoa opened in Reyðarfjörður in 2007. In addition, there have been plans to build two new smelting works, one in southwest Iceland and another in the northwest. These plans are now on hold due to the economic situation and because the current left-wing government is sceptical about large-scale industry. Landsvirkjun, the large state-owned energy company, is now managed by people who are not subject to strong political control as was the case before. New assessments from the company are raising doubts about large-scale industry; it seems that the smelting works get their energy very cheaply and the power plants which have been built because of them are unprofitable.

Green image in danger?

The right-wing parties, the employer associations and the labour movement still attach a great deal of importance to the continuing expansion of the aluminium industry. Their refrain is that there are not many other instruments to accelerate the Icelandic economy. This will result in a huge increase of greenhouse gases and it is worth noting that Iceland fell from 1st to 24th place on Climate Action Network's evaluation of different countries' performance last year. Three variables form the basis for this evaluation: progress with regard to emissions, total emissions and shaping of future policies. If there are to be new smelting works, there is a risk that Iceland's international green image will be in danger.

On the other side supporters of large-scale industry point out that in the grand scheme of things it is better to have smelting works operated by water and geothermal energy in Iceland than by environmentally unfriendly energy sources in other parts of the world.

Poor public transport

Traffic accounts for the greatest emissions. Icelanders are totally dependent on their cars and can barely budge without them. It is almost a sign that you have not accomplished much in your life if you use public transport. It is true that use of cars has diminished since the economic collapse in 2008 but that is not due a change of attitude, but simply to very poor household finances and high petrol prices.

Public transport in Iceland is bad; housing in the capital is spread out and not well organised for an efficient public transport system. There are no trains and nearly all goods are carried by road.

High-flying but unclear targets

The authorities have nevertheless set a goal that 10 per cent of the energy used by traffic will come from environmentally-friendly energy sources by 2020. This is ambitious and quite unrealistic in light of the fact that the proportion of environmentally-friendly vehicles today is only 0.35 per cent. A step in the right direction is a 10 year long pilot project on public transport which has recently been launched under the auspices of the state and local government. The idea is firstly that the state will contribute to the development of public transport in the metropolitan area - where the majority of people live - and secondly, the construction of new and larger roads will be postponed. It is still unclear though what resources will be put into this.

In Icelandic speeches there is often talk about the country being at the forefront of the development of environmentally-friendly energy sources. Hydrogen cars, electric cars and cars that drive on methane are used in Iceland but on a small scale. On the other hand, it is indisputable that Iceland has a lot of clean energy which could be harnessed for transport. However, it is difficult to see how Iceland can be a leader in this area considering the current situation - the possibilities are there, as has often been pointed out, but the country is totally dependent on imported oil.

The War against the Land

In the government's plans, carbon sequestration through forest regeneration and cultivating the land will give good results. It is worth noting that until the 1900s Iceland was almost entirely without trees - just after the settlement of Iceland an enormous destruction of vegetation began. Last century considerable emphasis was placed on forest regeneration, and today there are forests in many places and lots of trees in Reykjavik. The forests still only cover 1.16 per cent of the country. Large parts of Iceland are marked by erosion.

Another prospect is the restoration of the wetlands. During the last century, marshes were drained on a large scale; farmers got generous subsidies for this even though there was no need for it. Unsightly drainage ditches were dug out all over the place. Nobel prize-winning author Halldór Laxness protested against this in a famous article called the War against the Land.

Funding for the restoration of the wetlands is still small, but private companies have also shown an interest in the matter. Rio Tinto Alcan, which operates a smelting works near Reykjavik, is co-operating with Iceland's agricultural college to restore 5 square kilometres of wetland. This is equivalent to the emissions from 500 cars.

Oil nation

In the future there will probably be divided opinions about oil. Countries in the North Atlantic are dreaming of earning money from oil. They look at the Norwegians, flush with money, who are apparently immune to economic crises. It is likely that oil production will soon start up near Greenland and surveys being conducted on the so-called Dragon Area (Drekasvæðið) between Iceland and Norway look promising. On the other hand there will be challenges associated with extracting oil so far out to sea. Oil extraction will naturally clash with the Icelandic government's goals for climate change. In fact, there has been very little talk about how the exploitation of this resource should be organised, what the environment consequences will be and how a resource such as this should be taxed.

Considerable changes in the climate

The Icelandic climate has become warmer. It has been estimated that at today's levels it will be 1°C warmer by the middle of the century, and 1.4°C to 2.4°C in the second half. Most people are pleased about this because Iceland and is both cold and barren. New insects have begun to spread out and the treeline is creeping steadily up the mountainside. Agriculture will benefit from a warmer climate - it would create, for example, better conditions for cereal cultivation and longer summers - but it is uncertain what the consequences will be for life at sea. Cold water species are migrating northwards, but new species will possibly come instead. The collapse of the sea herring population is probably linked to warming. It is food for sea birds like puffins which have had trouble nesting in Southern Iceland for many years. On the other hand, many new species of fish, like mackerel, will come to Iceland. Mackerel is already an important part of the catch, but it will also be a source of conflict between Iceland, Norway, the Faroe Islands and the EU.

The glaciers are retreating and some will disappear if things go as seems likely now. It is almost impossible to ski in southern Iceland. The melting of ice at the North Pole is also affecting Iceland. It is possible that a shipping lane will open in the Arctic and that will bring both opportunities and risks to Iceland. There is danger of accidents and pollution but there are also opportunities for Iceland to develop ports for this shipping. The sea level rise could be a problem, for example in Reykjavik where in many places buildings are low lying. Another important aspect for Icelanders is the changes to the sea currents. It is because of the warm sea currents that Iceland is habitable. It is unlikely that this marine circulation will change at first, but there is an element of uncertainty in the predictions on how temperature conditions will change in Iceland.

The views expressed are those of the author.