It’s Going to Be More Expensive to Visit Iceland

By Bloomberg

Sep 20, 2023

image is BloomburgMedia_S1ALRXT0AFB401_22-09-2023_16-00-12_638309376000000000.jpg

HOF, ICELAND - AUGUST 15: Tourists look at icebergs that have broken off of receding Breidamerkurjokull glacier, which looms behind, at Jokulsarlon lake on August 15, 2021 near Hof, Iceland. Breidamerkurjokull, among the biggest of the dozens of glaciers that descend from Vatnajokull ice cap, is melting, losing an average of 100 to 300 meters in length annually. Breidamerkurjokull's meltwater has created Jokulsarlon, which is now Iceland's biggest lake. Iceland is undergoing a strong impact from global warming. Since the 1990s, 90 percent of Iceland's glaciers have been retreating and projections for the future show a continued and strong reduction in size of its five ice caps. (Photo by Sean Gallup/Getty Images)

(Bloomberg) -- Iceland is turning to taxes to reduce the impact exponential growth in tourism has on its pristine wilderness, Prime Minister Katrin Jakobsdottir said.

“Tourism has really grown exponentially in Iceland in the last decade and that obviously is not just creating effects on the climate,” Jakobsdottir said in an interview with Shery Ahn on Bloomberg Television from New York on Wednesday.

“Also most of our guests visit our unspoiled nature and obviously that creates a pressure,” she said. One way to tackle the climate impact of increased travel is to raise taxes for those who stay in the country, though the levies won’t be high “to begin with,” said the north Atlantic island’s 47-year-old leader.

WATCH: Iceland Prime Minister Katrín Jakobsdóttir says the country is raising taxes to curtail the impact of tourism on nature.Source: Bloomberg

Tourism is one of the Nordic country’s biggest industries. The island, which calls itself the land of fire and ice, attracts travelers who come to see lava flows, hot springs, geysers and waterfalls. It’s also a busy air-travel market due to its strategic location in the North Atlantic between Europe and North America.

The industry that generates about 6% of Iceland’s gross domestic product has a key role in the country meeting its climate pledge of being carbon neutral by 2040.

“A lot of the companies working in the tourism sector are finding ways to really turn over to circular economy,” and take action to reduce the use of fossil fuels, such as begin using electric cars, the prime minister said. “So that change is happening but it is a challenge.”

Some “very concrete steps” have been taken in response to climate change since her government took office in 2017, Jakobsdottir said. Iceland is tapping geothermal heat for heating and electricity, it’s subsidizing the green transition, improving energy efficiency and is working on carbon capture.

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With all that said, “we aren’t doing enough,” she said. “It’s very clear that all nations need to accelerate their climate action.”

By Ragnhildur Sigurdardottir