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Heavy rainfall feeds the numerous rivers and lakes in the glaciated landscape. Many of the lakes are dammed by lava flows or glacial ice. The presence of waterfalls is typical of the geologically young mountain landscape. The rivers are mainly debris-laden streams of glacial origin or clear streams formed by rainfall and springs of underground water. In the regions not drained by glacial rivers, fjords and smaller inlets cut into the rocky coasts. Because glacial erosion has often deepened the inner portions of the fjords, there are many fine natural harbours. Elsewhere the coasts are regular, sandy, and lined extensively with offshore sandbars that form lagoons to the landward side.
Soils
Iceland has soils of both mineral and organic composition. The mineral soils are basically a yellow-brown loess, formed by deposits of wind-transported matter. Both types of soil are suitable for agriculture, but, because of the slow rate of biological activity in the northern climate, they require heavy fertilization.
Climate
The climate of Iceland is maritime subarctic. It is influenced by the location of the country on the broad boundary between two contrasting air currents, one of polar and the other of tropical origin. The climate is affected also by the confluence of two ocean currents: the Gulf Stream, from near the Equator, and the East Greenland Current. The latter sometimes carries Arctic drift ice to Iceland’s northern and eastern shores.
Seasonal shifts in temperature and precipitation are largely the result of weather fronts crossing the North Atlantic. Relatively cold weather, particularly in the northern part of the country, results from the movement of a front south of Iceland; mild, rainy weather is brought by the movement of a front northeastward between Iceland and Greenland. Although its northernmost points nearly touch the Arctic Circle, Iceland is much warmer than might be expected.
Temperatures do not vary much throughout the country. The mean annual temperature for Reykjavík is 40 °F (4 °C). The mean January temperature is 31 °F (−0.5 °C), and the mean July temperature is 51 °F (11 °C). Snow falls about 100 days per year in the northwest, about 40 in the southeast. Annual precipitation ranges from 16 inches (410 mm) on some high northern plateaus to more than 160 inches (4,100 mm) on the southern slopes of some ice-capped mountains. In the south it averages about 80 inches (2,000 mm). Gales are frequent, especially in winter, and occasionally heavy fog may occur, but thunderstorms are rare. Although winters are fairly dark, Reykjavík averages nearly 1,300 hours of bright sunshine a year. Often the aurora borealis is visible, especially in fall and early winter.
Plant and animal life
Iceland lies on the border between a tundra vegetation zone of treeless plains and a taiga zone of coniferous forests. Only about one-fourth of the country is covered by a continuous carpet of vegetation. Bogs and moors are extensive, and sparse grasslands are often overgrazed. The remains of large birch forests are found in many places. A reforestation program instituted by the government in the 1950s has shown considerable success since the mid-1970s.
Foxes were the only land mammals in Iceland at the time of its settlement. Humans brought domestic and farm animals and accidentally introduced rats and mice. Later, reindeer were introduced, and many are still found in the northeastern highlands. After 1930, mink that were brought in for the production of furs also became wild in the country. Birdlife in Iceland is varied. Many nesting cliffs are densely inhabited, and the colony of ducks at Lake Mývatn, in the north, is the largest and most varied in Europe. Salmon and trout abound in the lakes, brooks, and rivers. The fishing banks off the Icelandic shores are abundantly endowed with fish, although these resources have been considerably eroded by overexploitation. There are no reptiles or amphibians in Iceland.
People
Ethnic groups and languages
The population of Iceland is extremely homogeneous. The inhabitants are descendants of settlers who began arriving in ad 874 and continued in heavy influx for about 60 years thereafter. Historians differ on the exact origin and ethnic composition of the settlers but agree that between 60 and 80 percent of them were of Nordic stock from Norway. The rest, from Scotland and Ireland, were largely of Celtic stock. The dominant language in the period of settlement was Old Norse, the language spoken in Norway at the time. Through the centuries it has evolved into modern Icelandic, which is used throughout the country. Modern Icelanders can still read Icelandic sagas in Old Norse without difficulty. There are no ethnic distinctions. The early Nordic and Celtic stocks have long since merged, and the relatively small number of subsequent immigrants (the largest portion of whom are Poles) has had only a limited effect on the population structure.
Religion
The Lutheran faith has been the dominant religion since the mid-16th century. More than two-thirds of the population belongs to the state-supported Evangelical Lutheran church. There is freedom of religion.
Settlement patterns
Because agriculture was the chief economic activity, the population of Iceland was evenly distributed throughout the inhabitable parts of the country until the end of the 19th century. With the advent of the fishing industry, commerce, and services at the beginning of the 20th century, the population became increasingly concentrated in towns and villages. At the beginning of the 21st century, more than 90 percent of the population lived in communities of 200 or more people.
The mainstay of most coastal towns is fishing and fish processing. The greatest population concentration is in Reykjavík and its environs, with about three-fifths of Iceland’s total population. Reykjavík is a modern, cosmopolitan urban centre that—in addition to being the seat of government—is the national focus of commerce, industry, higher education, and cultural activity. Akureyri, a fishing and educational centre situated on the Eyja Fjord in the north, is second in importance. Reykjanesbaer is a fishing port on the southwestern peninsula near Keflavík International Airport. The Vestmanna (Westman) Islands, off the southern coast, have some of the most important fishing operations in Iceland. Akranes, located across the bay from Reykjavík, is a service town for its region and has some industry. Ísafjördhur is a service town for the western fjord area. Seydhisfjördhur and Neskaupstadhur, on the eastern coast, are important ports for herring and capelin fishing. Höfn, on the southeastern coast, is also an important fishing port. Selfoss is in the southern lowlands, serving the farming region, and is the largest inland rural community in Iceland.
Demographic trends
The first comprehensive census in Iceland was taken in 1703, at which time 50,358 people were reported. The 18th century was marked by great economic hardship, and by 1801 the population had declined to 47,240. There began a slow increase in the 19th century, and by 1901 the population had risen to nearly 80,000. Accelerated economic growth during the early decades of the 20th century was paralleled by a rapid growth in population, which in 1950 exceeded 140,000. During World War II and the early postwar period there was rapid improvement in the standard of living and a new acceleration in the rate of population growth. The annual growth rate reached its peak during the 1950s and has been declining since 1960, primarily because of a sharply reduced birth rate and continued emigration. For a brief period from the late 1980s to the mid-1990s the birth rate rose again before resuming its downward trend. In the late 1980s the population reached a quarter of a million.
Between 1870 and 1914 there was large-scale emigration to Canada and the United States because of unfavourable conditions in Iceland; during that period emigrants outnumbered immigrants by the equivalent of about one-fifth of the 1901 population. Since 1901 emigration has continued to exceed immigration, though usually by only a small margin.
Economy
The Icelandic economy is based heavily on fishing and the production of a broad variety of fish products, but it also includes manufacturing and services. Exports account for about two-fifths of the gross national product. Despite Iceland’s small population, the economy is modern, and the standard of living is on a par with that of other European countries.
Most of Iceland’s production is in private hands. Government ownership has declined since the early 1990s through increased privatization of government-owned enterprises. The state shares ownership of most electricity-generating systems with local governments, and it assumed control of much of the banking sector in 2008 as a result of financial crisis.
Since World War II the government has aimed at a high rate of economic growth and full employment, and fluctuations in fish prices and catches have been an important influence on the economy. Iceland’s real gross domestic product (GDP) increased by an average of about 4 percent per year after the war. After 1987, however, there was a slowdown in economic growth because of limits imposed on fish catches in response to the depletion of fish stocks that had been overexploited for many years. From the late 1980s to the late 1990s the annual GDP growth rate averaged less than half what it had been. From the late 1990s to the mid- 2000s, however, there was a strong resumption of growth, mainly as a result of an improving fish catch and an influx of foreign capital. Iceland’s economy collapsed in late 2008 as a result of massive currency depreciation and the failure of its domestic banking industry.
Agriculture and fishing
As is the case throughout the Nordic countries, less than 5 percent of Iceland’s population is engaged in agriculture, and this number continues to decline. The raising of livestock—mostly sheep—and dairy farming are the main occupations. About one-fifth of the land is arable, most of it used for grazing. Greenhouses are common, especially in the southern part of the country. Iceland is virtually self-sufficient in fresh foods and dairy items, but it imports most other foodstuffs.
A steady improvement in Iceland’s fishing technology has increased catches despite the gradual erosion of what once were enormously rich fish populations off the country’s coasts. During the late 1980s and early 1990s the concern over declining fish stocks led the government to strengthen already strict catch quotas to further husband eroded fish stocks—particularly cod, the most important species. The strict quota regime paid off with a sharp increase in the cod stock in the late 1990s. Those catch quotas for domestic waters led to increased fishing in foreign waters, particularly in the Barents Sea and off the coast of Newfoundland.
Cod and capelin make up about two-thirds of the total catch, and whitefish species such as cod and haddock are exported fresh, frozen, salted, or dried. The capelin and herring catches usually are reduced to oil and meal but also are salted. In the mid-1990s Iceland’s total fish catch was between about 1.5 million and 2 million tons, of which about one-third was whitefish species and two-thirds were capelin and herring. Such fishing-related industries as boatyards, repair docks, and net factories are also important.
Iceland’s entry into distant fishing waters has caused friction with other countries over fishing rights. Herring fishing in the open ocean between Norway and Iceland is a matter of debate between the two countries as is blue whiting fishing in the North Atlantic between Iceland, Norway, and the European Union (EU). Moreover, Canada has objected to Iceland’s shrimp fishing off the coast of Newfoundland.
Resources and power
Iceland’s energy resources are vast. Feasible hydroenergy is estimated at nearly six gigawatts and geothermal energy at more than 1.5 million gigawatt hours per year. Only about one-eighth of the hydroelectric power of the country’s rivers has been tapped. Geothermal energy heats all of Reykjavík and several other communities; it provides steam for industrial energy and is used in commercial vegetable farming in greenhouses. Despite its vast natural resources, Iceland produces more greenhouse emissions per capita than any other country. To reduce emissions and eliminate the country’s reliance on imported oil, in the early 21st century Iceland initiated small pilot projects aimed at determining the feasibility of creating a hydrogen-based society.
Manufacturing
The main manufacturing enterprise for export is aluminum production, which uses domestic hydroelectricity to smelt aluminum from imported alumina. Other manufactured goods for export include ferrosilicon, an alloying agent for steel production; diatomite, an industrial filtration agent produced from diatomaceous earth with geothermal steam; fish-processing equipment; fishing gear; and prosthetic devices. There are also small industries that produce computer software, cement, fertilizer, food, clothing, and books.
