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07/07/2023 - 10:00

Iceland’s negative spillover effects based on consumption and import 

Iceland’s negative spillover effects based on consumption and import  - Available at University of Iceland

Specialists at the Sustainability Institute of the University of Iceland contributed a chapter for Iceland’s Voluntary National Review (VNR), a report on Iceland’s progress with implementing and achieving  the United Nations Sustainable Development Goals (SDGs), which the Icelandic government has submitted to the United Nations. The chapter is based on an evaluation carried out by the Sustainability Institute which shows that Iceland’s spillover effects on other countries in relation to the SDGs is quite negative. These effects are mostly connected to both high consumption and importation, furthermore, the development of a circular economy in Iceland is still in its infancy.  

Iceland’s Voluntary National Review will be presented at the High-Level Political Forum on Sustainable Development in New York on July 18th. In the VNR report, which is now compiled for the second time, the implementation of the SDGs in Iceland is discussed. The University of Iceland’s strategy, UI26, the university’s commitment to sustainability, and the issuing of the university’s first Sustainability report last year, receive a special mention in the report. Iceland’s spillover effects are also discussed in the report, in a chapter written by the Sustainability Institute at the University of Iceland, based on an evaluation carried out by the institute at the request of the Prime Minister’s Office earlier this year. At the High-Level Political Forum in New York, Iceland will specifically address international spillover effects at a side event organised by the Icelandic government, held on July 11th at 2 PM, GMT. The event will be streamed here: https://www.government.is/topics/sustainable-iceland/side-event-on-spillover-effects/ 

Spillover effects refer to the positive or negative impact that one country’s actions can have on other countries’ ability to achieve the SDGs. It can prove difficult to fully measure spillover effects, but the international standard generally used to measure spillover effects categorises them into three dimensions:  

  1. Environmental and social spillovers embodied into trade,  
  2. Spillovers related to economic and financial flows,  
  3. Peacekeeping and security spillovers.  

Accurate and comprehensive data, as well as internationally agreed-upon analytical methods and models, are vital for measuring spillover effects. Unfortunately, due to a lack of data, international spillovers have not been fully measured to date.  

Iceland among those with the most negative spillover effects 

While the most prosperous countries in the world, including the Nordic countries, have made significant progress in implementing the SDGs domestically, they have also been found to generate significant negative spillover effects. Iceland, for example, ranks 158th of the 163 states with available data, indicating a high level of negative spillover effects. Iceland has the lowest ranking among the Nordic countries. Thus it is clear that it is insufficient for states to focus solely on implementing the SDGs domestically, they must also actively work to mitigate negative spillovers that hinder the opportunities of developing nations to achieve the SDGs at home.  

Most states are in the early stages of acknowledging and mapping their spillover effects. However, indirect efforts have been made through legislation and policy to counteract negative spillovers. It is crucial that spillover effects are given due consideration, and decisive actions are taken to prevent their adverse consequences.  

Iceland’s carbon footprint among the largest in the World 

The conclusions of the Sustainability Institute’s evaluation show that Iceland generates significant negative spillover effects, particularly in relation to the consumption of goods and large number of imports, alongside the primitive state of the circular economy. Recent studies indicate that Iceland’s carbon footprint is among the largest in the world when all imported goods are taken into account.  

  1. Consulted experts agreed that significant work lies ahead for Icelandic authorities to address and combat these negative spillover effects. The main objectives could be divided into the following aspects: Establish a clear vision, goals, and action plan,  
  2. Enhance understanding of Iceland’s spillover effects,  
  3. Promote the circular economy and reduce consumption, and  
  4. Increase Iceland’s contribution to international development cooperation.  

Present a clear vision and implement green incentives  

The Sustainability Institute of the University of Iceland propose prioritising four actions:  

  1. Present a clear vision, goals, and funded action plan,  
  2. Establish a consultation platform for data collection and measurements related to Iceland’s spillover effects,  
  3. Increase research and data collection efforts, and  
  4. Implement green incentives, green taxes, and a strategy for green public procurement.   

In Iceland’s VNR report the Icelandic authorities stipulate that the results of the evaluation will be used in developing a national policy on sustainable development that is estimated to be ready by the end of this year. The Sustainability Institute and the government will continue to cooperate on studying Iceland’s spillover effect. It is clear that the University of Iceland has a lot to offer concerning sustainable development and the importance of successful cooperation in the area has been proven yet again.  

Main building of the University of Iceland