Iceland's geographic position in the Arctic region and our outlook on climate change are intertwined and inseparable. Nowhere else on the planet are the effects of climate change as visible as in the Arctic region. Temperatures in the Arctic are rising twice as fast as the world average and the effects of climate change in the Arctic during a 10-year period are equal to those of 25 years in other regions of the Earth. These are real challenges. The effects have a global reach and global solutions are required. The solutions are known and it is now our responsibility to carry them onward to realization. COP21 in Paris brings us a unique opportunity, here and now, to bring about a bold blueprint for the future. For us in the Arctic, the stakes are high, since our environment and our very livelihood is at stake.
Iceland is the only country in the northern hemisphere that is fully within the Arctic region. Reykjavík is the northernmost capital in the world. Our economy relies to a large extent on the interplay between man and nature and continued sustainable use of natural resources. In fact, few countries have greater stakes than Iceland in the international community finding a balance between exploitation and conservation.
Two decades after the Kyoto Protocol, the global energy mix has still not changed. Fossil fuels make up 81% of the energy supply and renewable energy only accounts for 13.5%. This needs to change. Continued fossil fuel dependency cannot be our inheritance to future generations. A recent IMF report raises critical questions in this respect. According to the study, direct subsidies world-wide toward the oil and gas industry amount to a staggering 333 billion USD annually. If these subsidies would be phased out global carbon emissions could be reduced by 20%. This, coupled with the fact that the operating costs of these subsidies amount to 10 million USD per minute, frames the picture quite vividly!
The vehicles for change are already there and it has been encouraging to follow international consensus mounting in the run up to COP21. There are still hurdles, but in the past few years there has been a meaningful change at the international level in the way in which we address challenges through policy approaches. In this respect, Iceland has a lot to offer and our approach is derived from our immediate surroundings and my country´s unique geological characteristics.
Iceland's stationary energy production is 85% renewable (hydro and geothermal) and although this production is localized, it fosters global solutions through our know-how, expertise and capacity-building. The world has geothermal energy in abundance and coupled with other renewable-energy resources, geothermal is a meaningful step toward economic growth and prosperity -- free of fossil fuels. In fact, there are important lessons to be drawn from the Icelandic experience that can shed a light on how to make us much more aware of the potentials and benefits associated with geothermal energy. When the oil crisis struck in the early 1970s, the world market price for crude oil rose by 70%. At that time, only 43% of the Icelandic population enjoyed geothermal heating. This meant that large areas where harnessing geothermal had been deemed too costly or too difficult were using subsidised coal and diesel oil for heating. However, this figure rose dramatically in the few years after the oil crisis. There was a concentrated political will to change the picture drastically -- government, local authorities and industry joined hands and resources were made available. In short, the focus was on long-term solutions and "patient capital" was invested.
One might argue that Iceland, with its peerless geological characteristics, is a unique case in point. Up to a degree this is true. However, all over the globe the geothermal potential is far from being fully realized and Icelanders are instrumental in building global capacity in this field through the UN University Geothermal Training Programme, which is hosted in Iceland, and applying its expertise and know-how through its agencies and private companies that operate in many continents. Geothermal can become a much larger part of the heating capacity world-wide. The potential is certainly there. Currently, geothermal energy installations are operating or being built in continental Europe, China, the Philippines, and in East Africa in cooperation with Icelandic operators. An especially noteworthy cooperation is in the East Africa Rift Valley States where Iceland joins forces with the World Bank under a Global Geothermal Development Plan, which could amount to 500 million USD. This is the largest initiative so far in promoting this energy source in the developing world and we are confident that it will bring benefits to millions of people. There are strong currents flowing in this direction. In Paris, Iceland will join 34 countries in launching the Global Geothermal Alliance. The sheer number of geothermal allies exhibits how important a revolutionary energy transformation toward renewable-energy resources must play in our future.
We are at the outset of COP21 in Paris. Our task is set. The stakes are high. We must reach an ambitious new Climate Agreement between all countries. We need to foster cooperation in finding ways to facilitate the necessary changes in how we lead our lives. Energy consumption and energy production is a critical part of that puzzle.
Gunnar Bragi Sveinsson is Iceland's Minister for Foreign Affairs since May 2013 and his portfolio also includes external trade, international development cooperation and security and defense. Mr. Sveinsson was elected to Althingi, the Parliament of Iceland, in 2009 for the Progressive Party and first served as his Chair of the Parliamentary Group and leader of the Foreign Affairs Committee. During Mr. Sveinsson's tenure as Minister for Foreign Affairs, Arctic issues and Climate change have been high on the agenda and in his work he has been a strong advocate for raising international awareness of the global challenges and Iceland's contribution in this field.
This post is part of a "Nordic Solutions" series produced by The Huffington Post, in conjunction with the U.N.'s 21st Conference of the Parties (COP21) in Paris (Nov. 30-Dec. 11), aka the climate-change conference. The series will put a spotlight on climate solutions from the five Nordic countries, and is part of our What's Working editorial initiative. To view the entire series, visit here.