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.

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:

The following signs are used in Figures and Tables:

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.