Zoe Zenowich & The Thesis

I intend to examine the necessary legal restructuring for Iceland to emerge from the current financial crisis with a strong economy structured around the restoration of- (1) fishing stocks, (2) wetlands, and (3) the full implementation of the European Union Emissions Trading Scheme (EU ETS).  I consider the most profitable and sustainable app[i]roaches to rebuilding Iceland’s economy, identify challenges that emerge and the legal framework which ensures minimal exploitation of Iceland’s natural resources. Iceland has the second largest untapped geothermal energy in the world, and the largest area of pristine wilderness in Scandinavia. Iceland’s geothermal energy is slowly being auctioned off to foreign companies to make up for lost government revenue. It is important for Iceland to find other solutions for creating revenue that will generate long-term employment, and cause minimal exploitation to the environment.

First, I argue for Iceland’s admission to the EU and full adaptation of ETS. An internal working paper released in May 2010 by the European Commission maintains that EU member states could make €26 billion in profit annually by 2020 through auctioning emission permits, and as much as €928 million a year by 2012 through the auctioning of permits to airlines.[ii] The profit Iceland could make, especially in light of their heavy airline traffic and vast geothermal- and hydro energy, will strengthen their economy considerably, and could be incentive to cease further aluminum smelter negotiations with Alcoa.   Iceland applied for EU membership in July 2009, negotiations started in July 2010, and now the EU has opened accession talks. The European Commission recognizes that Iceland has already assimilated many of its national laws in accordance with EU laws.[iii] But progress has halted because the EU demands Iceland resolve the continued dispute with the UK and the Netherlands over the money lost when the online Icesave bank collapsed.[iv] Public opposition to joining the European Union is also a challenge.[v] Media and polls document public fear that the EU will regulate fishing quotas and whaling. But joining the EU would ensure vital legal restrictions on excessive external exploitation of geothermal extraction[vi] by means of the full implementation of the EU ETS.[vii] Fully implementing the EU ETS would also give Iceland further incentive to ease their dependency on renewing business contracts with Alcoa, and the planned expansion of aluminum smelters throughout Iceland, which have devastating impact on local farming communities. [viii] Iceland will not join the EU unless Icelanders support the decision in a referendum that may be held in early 2012. According to three polls conducted by Gallup between May and September 2010, 69 percent of those asked oppose Iceland joining the EU. There are concerns expressed by politicians that Iceland will no longer have a say in EU laws affecting national politics. [ix] This is a misconception. By joining the EU, Iceland would gain autonomy. Already a member of the EEA, Iceland implements all laws of the common market, except for agreements on fisheries and agricultural policy. Because a large majority of Iceland’s current laws are decided in Brussels, joining the EU means Iceland has a say laws already adopted by the Icelandic Parliament. Thus, Iceland would gain more autonomy by joining the EU.[x]

Second, I argue for wetland and wildlife restoration. New legislation from the Environmental- and Planning Ministry of Iceland proposes considerable limitation on foreign access to Iceland’s natural resources—the water, wetlands, glaciers, geothermal- and hydro energy for smelters.[xi] Proposals from the United Nations Framework Convention on Climate Change outline the importance, and potential profit, of implementing a legislative remedy to wetland restoration.[xii] Restoring drained and degraded wetlands would reduce carbon, nitrous oxide and methane from the atmosphere—an innovative means for Iceland to meet their annual EU ETS emissions requirements.

Third, I argue for the commitment to fish stock restoration. Fish stock restoration is vital to the Icelandic economy as 60% of Icelandic exports are fish products.[xiii] In order to restore fishing stocks, there must be strict government regulation.  But citizens and politicians are also wry of outside intervention in national fishing matters, and fears are often publicly expressed that joining the EU will cause outside intervention in national quota laws.[xiv] Public distrust is exemplified by a history of fishing “wars” with the United Kingdom, most famously the Cod-wars.[xv] To combat the dangers of fish depletion, fishing stocks must be restored through stricter government regulation, which ensures appropriate national laws are in place to protect Iceland’s fishing interests before the country joins the EU.

My paper will explore how the implementation of the EU ETS, and legal restructuring which mandates restoration of fishing stocks and wetlands, can fuel Iceland’s economy, and create long-term job solutions that do not disappear when natural resources are tapped out. I will consider why joining the EU will give Iceland more autonomy by allowing the country to contribute to EU discourse on laws which have already been adopted.


[ii] Wit, Ron, Bart Boon, André van Velzen, Martin Cames, Odette Deuber, and

David Lee, “Giving Wings to Emissions Trading: Inclusion of Aviation Under the European Emission Trading System, Design and Impacts,” European Commission, May 2010,

http://ec.europa.eu/environment/climat/pdf/aviation_et_study.pdf (accessed October 8, 2010).

[iii] “EU Enlargement: The Next Eight,” BBC World News, http://www.bbc.co.uk/news/world-europe-11283616 (accessed September 14, 2010).

[iv] Neelman, David, “Grimsson Says Iceland Seeks Solution in Depositor Spat: Video,” Washington Post Online, http://www.washingtonpost.com/wp-dyn/content/video/2010/09/14/VI2010091407299.html (accessed September 24, 2010).

[v] “Many Icelanders Keen on Adopting Euro, Mixed on EU,” Gallup,” http://www.gallup.com/poll/118381/icelanders-keen-adopting-euro-mixed.aspx (accessed October 5, 2010).

[vi] Sigurjónsson, Júlís, “Forsetar Raeddu Orkumalin,” Morgunbladid,” http://www.mbl.is/mm/frettir/innlent/2010/09/19/forsetar_raeddu_orkumalin/ (accessed September 19, 2010).

[vii] “Establishing a Scheme for Greenhouse Gas Emission Allowance Trading Within the Community and Amending Council Directive 96/61/EC,” Journal of the European Union, http://eurlex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2003:275:0032:0032:EN:PDF (accessed September 14, 2010).

[viii] Del Giudice, Marguerite, “Power Struggle,” National Geographic Magazine, http://ngm.nationalgeographic.com/2008/03/iceland/del-giudice-text (accessed September 22, 2010).

[ix] Brown, Ian T., “Many Icelanders Keen on Adopting Euro, Mixed on EU,” Gallup, http://www.gallup.com/poll/118381/icelanders-keen-adopting-euro-mixed.aspx (accessed October 5, 2010).

[ix] As proposed, but never implemented, by Icelandic parliament for AWG-KP 6, part I meeting in Acura 2008.

[x] Van Treek, Sophia, “Sophia and the EU,” The Reykjavik Grapevine, http://www.grapevine.is/Home/ReadArticle/Sophia-And-The-EU- (accessed October 18, 2010).

[xi] “Legislation,” Ministry for the Environment, Iceland, http://eng.umhverfisraduneyti.is/legislation/ (accessed October 5, 2010).

[xii] United Nations Framework Convention on Climate Change, “Iceland – Economic Analysis of Climate Change Mitigation Potential,” KP Workshop, Bonn, 27 March 2009, http://unfccc.int/files/kyoto_protocol/application/pdf/1_8_iceland.pdf (accessed October 18, 2010).

[xiii] Food and Agriculture Organization of the United Nations, “FAO Country Profiles, Iceland,” Food and Agriculture Organization of the United Nations, http://www.fao.org/countryprofiles/index.asp?lang=en&iso3=ISL&subj=4 (accessed October 18, 2010).

[xiv] McFarlane, Andrew, “Why Is Britain Braced for a Mackerel War?” BBC World News, http://www.bbc.co.uk/news/magazine-11062674 (accessed August 25, 2010); BBC News, “Faroes and Iceland urged to back down over mackerel,” BBC News, http://www.bbc.co.uk/news/uk-scotland-11199799 (accessed September 10, 2010); BBC News, “Scottish fishermen are to boycott a meeting in the Faroe Islands over the host country’s decision to unilaterally increase mackerel quotas,” BBC News, http://www.bbc.co.uk/news/uk-scotland-11199799 (accessed September 10, 2010).

[xv] The Cod wars, or Þorskastríðin, was a series of territorial confrontations in the 1950s and 1970s regarding fishing rights in the Atlantic between the United Kingdom and Iceland. In 1976 Britian deployed naval vessels within the disputed waters and Iceland treatened to close the major NATO base in Keflavik—the dispute ended shortly thereafter.

BBC News, “1975: Attack on British vessels heightens Cod War,” BBC News, http://news.bbc.co.uk/onthisday/hi/dates/stories/december/11/newsid_2546000/2546045.stm (accessed September 22, 2010).

Annotated Bibliography

November 9, 2010 | HTC10-11  |  Leave a Comment

1. European Commission Climate Action, http://ec.europa.eu/clima/policies/eu/index_en.htm, accessed October 18, 2010.

This website helps me to understand the European Union Emissions Trading Scheme (EU ETS). I can access the information of almost everything pertaining to the EU ETS, including recent proposals by other countries and legal amendments. This website publishes estimates, and realities, of the fiscal benefits of implementing the EU ETS. The website also publishes reports, such as the internal working paper released in May 2010 by the European Commission which maintains that the EU member states could profit as much as €26 billion annually by 2020 through auctioning emission permits and as much as €928 million a year by 2012 through the auctioning of permits to airlines, a new addition to the Phase III of the ETS which begins January 2013. There are no specific points of view this website takes other than promoting the EU ETS. I access this website weekly.

2. Swan, Jon, “The Icelandic Rift Industry Versus Natural Splendor in a ‘Progressive’ Nation,” Orion Magazine, March/April 2004, http://www.savingiceland.org/2005/09/the-icelandic-rift-industry-versus-natural-splendor-in-a-progressive-nation-by-jon-swan/, accessed October 18, 2010.

Provides important historical information regarding Iceland’s involvement with Alcoa and the privatization of the geothermal energy. Helps to strengthen my argument on why the further privatization of Iceland’s geothermal energy would be detrimental to Iceland’s economy in the long run, which in turn further justifies my recommendation of the necessity for stricter regulation of geothermal energy. Swan draws on financial data to illustrate why heavy industry weakens the Icelandic currency, and how it contributed to the current financial crisis. Swan also draws on ecological- and case studies to exemplify the long-term dangers of executing heavy industry projects that strip the land of natural resources. I access this website weekly.

3. Iceland Nature Conservation Association, http://www.inca.is, accessed October 18, 2010.

I utilize this as a source for news and policy proposals. This site rounds up national news pertaining to the protection of Icelandic nature. The website helps me to locate the most recent national findings pertaining to the exploitation of Iceland’s natural resources, as well as the national response. Usually, the articles found on this website support more environmental regulation, and favor sustainable approaches to industry, which exclude the involvement of Alcoa. I access this website weekly.

4. BBC World News, http://www.bbc.co.uk/news, accessed October 18, 2010.

I utilize this website as a means of monitoring the British take on events that are going on in Iceland. The BBC World News is especially helpful for following coverage of Iceland’s ‘fishing wars,’ and other issues pertaining to fishing stock restoration. I cite many articles from the BBC World News while discussing the necessity of fishing stock restoration. The slant of the BBC articles is arguably more sympathetic to British foreign policy, but the information is factually correct. I access this website weekly.

5. The European Union, http://europa.eu/index_en.htm, accessed October 18, 2010.

I use this website to monitor recent developments within the European Union, especially new legislation and treaties. This offers me a greater understanding of how the EU functions. I access this website bimonthly.

6. Althingi Islands (the Icelandic Parliament), http://www.althingi.is/, accessed October 18, 2010.

This is the official website of the Icelandic Parliament. I use this website to track past and current legislation, as well as to gain insight into current political trends and opinions (usually by listening to the speeches made by the heads of the main political parties). This website is important because it backs up my assertions that Iceland should join the EU as well as utilize wetland restoration as a means of meeting EU ETS emissions requirements because I can hear the politicians discussing the proposals, such as Svandis Svavarsdottir’s address on February 2, 2010 where she urges members parliament and the Environmental Planning Committee to seriously consider a complete restructuring of environmental- and energy policies in preparation for Phase III of the ETS, drawing a connection between the current financial crisis in Iceland and their involvement with heavy industry. Her speech, and other findings, helps to strengthen my thesis claim that Iceland must restructure the wetlands and fully embrace the EU ETS. (Svavarsdottir is the chair of the Left-green movement which currently holds parliamentary majority. She is also the Minister of the Environment.) I access this website biweekly.

7. Umhverfisráðuneytis (The Ministry of Environment), http://www.umhverfisraduneyti.is/, accessed October 18, 2010.

I utilize this website as a reference for environmental legislation in Iceland, as well as a source for current proposals and reports. I access this website weekly.

8. Landbúnaður (Ministry of land-use, land-use change, and forestry (LULUCF)) , http://landbunadur.is/landbunadur/wgsamvef.nsf/key2/index.html, accessed October 18, 2010.

I utilize this website as a reference for current legislation pertaining to the land-use in Iceland. It is a vital source for current wetland restoration proposals. I can also track the history of land permits, which helps me to understand Iceland’s history with Alcoa. I access this website bimonthly.

9. Saving Iceland, www.savingiceland.org, accessed October 18, 2010.

I utilize this site as a source for news. The web site rounds up international news pertaining to Iceland’s involvement with international corporations involved with the privatization and exploitation of natural resources. This website also helps to further my argument of why Iceland must protect its natural resources as a means to ensure biodiversity and fiscal independence. The material found on the website is always sympathetic to the environment, and critical of heavy industry and foreign control of natural resources. I access this website weekly.

10. United Nations Framework Convention on Climate Change, “Iceland – Economic Analysis of Climate Change Mitigation Potential,” KP Workshop, Bonn, 27 March 2009, http://unfccc.int/files/kyoto_protocol/application/pdf/1_8_iceland.pdf, accessed October 18, 2010.

A policy proposal that evaluates the environmental and fiscal motivations for why Iceland, and other small countries with industry, should focus on wetland restoration as a means of meeting their yearly EU ETS emissions requirements. Includes the scale and cost of mitigation actions, and justifications for adopting such measures. The proposal outlines why wetland life restoration is productive as a means to meet the yearly carbon emissions quota (as applicable to member states of the EU ETS), and why/how adopting such measures will promote sustainability initiatives while simultaneously generating money.

11. Tuerk, Andreas, ed. Linking Emissions Trading Schemes. London: Earthscan Publications, 2009.

This is a collection of essays by different scholars and politicians throughout the world. The articles outline how different countries are implementing the EU ETS. The research included in this book examines the economic, political and institutional implications of implementing the EU ETS. All of the articles are analytical, but some are more critical than others. The collection is most helpful to me because it explores different approaches to implementing the EU ETS, as well as how countries can link their approaches to make the ever-evolving EU ETS scheme more efficient.

12. Freestone, David and Charlotte Streck, eds. Legal Aspects of Carbon Trading: Kyoto, Copenhagen and Beyond. Oxford: Oxford University Press, 2009.

This book embraces the EU ETS, exploring the main legal issues which are raised by the explosion of carbon finance, that is the EU ETS. In addition, the Kyoto Flexibility Mechanisms are explored, which further my understanding of how wetland restoration can be applied as a means of meeting annual carbon caps. The book also gives a superb background of the EU ETS. Unlike many other sources, this one explores in detail the one of the newest phases of the EU ETS, the aircraft emissions scheme, as well as the latest mitigation actions that countries are taking in light of the increased climate change worries.

I grew up in Iceland from the age of eleven till the age of twenty-one. I lived for a couple years with a family on a small dairy and sheep farm in the far north-eastern reaches, during which time I became involved in politics. The community was in the midst of consolidating districts; schools were closing; jobs were scarce. There was a lot of political tension. My foster-mother was running for a county assembly position. Everyone was engaged and had an opinion. Kids came to school knowing which side my foster mother was on. So, I was quick to read up on the different positions so I could answer attacks.  Quickly, I realized I disagreed with my foster-mother’s position–a more conservative approach which favored consolidation and increased privatization. Instead, I favored the green-left party’s doctrines, and immediately signed up for newsletters.

A year later, I turned sixteen, the age of graduation from High School in Iceland. I moved to Akureyri to continue my education, and then again to Reykjavik the following year. During this time, I became increasingly involved with various divisions of international and national social and environmental justice groups which staged protests against smelters being built by the American aluminum company, Alcoa.

News circulated about the irreversible damage to the nature the smelters were causing, in addttion to the increased pollution which was harming local farmers’ crops and animals.

I relate this particular aspect of my youth because it is my early experience with politics that helped mold many of the opinions I hold today regarding issues pertaining to the environment, legal approaches, and political philosophy. When I moved back to America at twenty-one, I had lived half my life in Iceland–eleven of arguably the most formative years of a person’s life. I had married an Icelander, spend some years living with an Icelandic family, I felt Icelandic. So, when the Icelandic economy collapsed in 2008, it was scary. Not only did I have all of the money I had saved up for Brooklyn College in an Icelandic bank account (which was frozen for two weeks), but my husband was called home to help his family recuperate some of their own economic losses by adding an additional household income. When I finally did have access to my bank account again, the money was worth 1/3 of what it had been only 14 days before.

The financial collapse, coupled with my history of involvement in the environmental justice movement in Iceland, made me want to write my thesis on what Iceland needs to do to recuperate not only financially, but also environmentally, following the increased privatization of their natural resources and the economic collapse of 2008. Stylistically, I chose to approach the thesis as a legal analysis because I hope to attend law school, where I intend on pursing public interest law. This in turn meant that I expect my audience to be professionals and/or scholars, but I also expect to give enough information that the reader will need no prior knowledge of Iceland to become engage in the text.

I. Abstract

The following is an examination and recommendation of the legal restructuring necessary for Iceland to emerge from the current financial crisis with a strong economy structured around the restoration of- (1) fishing stocks,  (2) wetlands, and (3) the implementation of the European Union Emissions Trading Scheme. While addressing the most profitable and sustainable approaches to rebuilding Iceland’s economy, this paper will simultaneously identify the challenges that emerge, and the legal framework that is necessary to ensure minimal exploitation of Iceland’s natural resources.

II. Introduction

(a) Restate Thesis with topic summary

III. Wetlands Restoration

(a)    Challenges – Abundant scholarly research, but policy incentives to conserve wetlands are lacking at present.[i]

(b)   Legal history[ii]

(c)    Recommendation for Iceland to restore drained and degraded wetlands as means of reducing carbon, nitrous oxide and methane from the atmosphere. Also a proposal of an additional way for countries to meet their EU ETS mitigation commitments.

IV. Fishing Stock Restoration

(a)    Challenges – public opposition. In order to restore fishing stocks, there must be strict government regulation.  But citizens and politicians are also wry of outside intervention in national fishing matters, and fears are often publicly expressed that joining the EU will cause outside intervention in national quota laws[iii]. Public distrust is exemplified by a long history of fishing “wars” with the United Kingdom, most famously the Cod-wars[iv]. Currently, Iceland is engaged in a dispute with Scotland and the Faeroes over mackerel.[v]

(b)     Legal history[vi]

(c)     Recommendation to restore fishing stocks through stricter regulation, while simultaneously ensuring that national laws are in place which protect Iceland’s fishing interests before the country joins the EU.

V. Hydro- and Geothermal energy “exploitation”

(a) Challenges

(i) Public opposition to joining the European Union. There is fear of outside regulation, especially of regulations on fishing quotas and whaling. But joining the EU could ensure vital legal restrictions on excessive external exploitation of geothermal extraction[vii] through the full implementation of the EU Environmental Trading Scheme (ETS).[viii] Fully implementing the EU ETS would also give Iceland further incentive to ease their dependency on renewing business contracts with ALCOA, and the planned expansion of aluminum smelters throughout Iceland[ix], which have devastating impact on local farming communities. However, Iceland will not join the EU unless Icelanders support it in a referendum which may be held in late 2011 or early 2012. According three polls conducted by Gallup between May and September 2010, between 54 and 69 percent of those asked oppose Iceland joining the EU.[x]

(ii) Iceland applied for membership to the EU in July 2009, negotiations started in July 2010 and the EU has opened accession talks. The European Commission recognizes that Iceland has already assimilated two-thirds of its national laws in accordance with EU laws. But progress has halted because the EU has demanded that Iceland resolve the continued dispute with the UK and the Netherlands over the money lost when the online Icesave bank collapsed in 2008.[xi] (Icelanders rejected a payment plan in a referendum held in March 2010. The UK and Dutch governments want Iceland to reimburse $5billion which they paid as compensation to Icesave investors.)[xii] The EU expects Iceland to implement more regulations on the financial system in order to qualify for membership. [xiii]

(b) Legal history[xiv]

(c) Recommendation for Iceland to join the EU, fully implementing the European Union  Emissions Trading Scheme as a way to both profit from the extraction of natural resources, and regulate the amount of exploitation.

VI. Conclusion

[i] 1. “Third Informal Dialogue on LULUCF,” Landbunadur.is, accessed September 14, 2010, http://landbunadur.is/landbunadur/wgrala.nsf/key2/hhjn7etf6x.html

2. “Wetland Restoration; A Proposal for an Amendmentto Decision 16/CMP.1 on Land Use, Land-Use Change and Forestry adopeted by Decision 11/CP.7, “Ministry for the Environment,” www.coford.ie/iopen24/pub/workshop-Iceland.pdf

3. “Informal Data Submission on LULUCF to the Ad-Hoc Working Group on Fuerther Commitments for Annex I Parties Under the Kyoto Protocol (AWG-KP),” United Nations Framework Convention on Climate Change, accessed September 14, 2010, http://unfccc.int/files/kyoto_protocol/…/awgkplulucficeland081209.pdf

[ii] “Legislation,” Ministry for the Environment, accessed October 5, 2010, http://eng.umhverfisraduneyti.is/legislation/

[iii] “Why Is Britian Braced for a Mackerel War?” BBC World News, accessed August 25, 2010, http://www.bbc.co.uk/news/magazine-11062674

[iv] The Cod wars, or Þorskastríðin, was a series of territorial confrontations in the 1950s and 1970s regarding fishing rights in the Atlantic between the United Kingdom and Iceland. In 1976 Britian deployed naval vessels within the disputed waters and Iceland treatened to close the major NATO base in Keflavik—the dispute ended shortly thereafter. “1975: Attack on British vessels heightens Cod War,” BBC News, accessed September 22, 2010, http://news.bbc.co.uk/onthisday/hi/dates/stories/december/11/newsid_2546000/2546045.stm

[v] 1. “European Parliament Could Take Action In Mackerel Fish Row,” BBC News, accessed August 30, 2010, http://www.bbc.co.uk/news/uk-scotland-11126330

2. “Faroes and Iceland urged to back down over mackerel,” BBC News, accessed September 10, 2010, http://www.bbc.co.uk/news/uk-scotland-11199799

3. “Scottish fishermen are to boycott a meeting in the Faroe Islands over the host country’s decision to unilaterally increase mackerel quotas,” BBC News, accessed September 10, 2010, http://www.bbc.co.uk/news/uk-scotland-11199799

[vi] “Lagasafn,” Althingi.is, accessed October 4, 2010, http://www.althingi.is/vefur/lagasafn.html

[vii] “Forsetar Raeddu Orkumalin,” Morgunbladid,” accessed September 19, 2010, http://www.mbl.is/mm/frettir/innlent/2010/09/19/forsetar_raeddu_orkumalin/

[viii] “Establishing a Scheme for Greenhouse Gas Emission Allowance Trading Within the Community and Amending Council Directive 96/61/EC,” Official Journal of the European Union, accessed September 14, 2010, http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2003:275:0032:0032:EN:PDF

[ix] “Power Struggle,” The National Geographic Magazine.,” accessed September 22, 2010, http://ngm.nationalgeographic.com/2008/03/iceland/del-giudice-text.

[x] “Many Icelanders Keen on Adopting Euro, Mixed on EU,” Gallup,” accessed October 5, 2010,  http://www.gallup.com/poll/118381/icelanders-keen-adopting-euro-mixed.aspx

[xi] “Grimsson Says Iceland Seeks Solution in Depositor Spat: Video,” Washington Post Online, accessed September 24, 2010 http://www.washingtonpost.com/wp-dyn/content/video/2010/09/14/VI2010091407299.html

[xii] “Iceland panel wants charges over 2008 bank collapse,” Reuters, Accessed September 12, 2010, http://www.reuters.com/article/idUSTRE68A1JP20100911

[xiii] “EU Enlargement: The Next Eight,” BBC World News, accessed September 14, 2010, http://www.bbc.co.uk/news/world-europe-11283616

[xiv] “Legislation,” Ministry for the Environment, accessed October 5, 2010, http://eng.umhverfisraduneyti.is/legislation/