How to measure national energy sustainability performance: An Icelandic case-study

Abstract

The development of sustainable energy systems is now firmly on the international agenda. Nations and their governments must strive to implement energy policies that facilitate sustainable development for society. Although Iceland is highly ranked by currently available energy indices, controversy has surrounded the development of previously undeveloped areas for power development and Iceland now finds itself at a crossroads regarding future energy developments. Well-designed indices for measuring the sustainability of energy systems can help policy-makers make the best choices for their national circumstances. However, often indicators and indices suffer from limitations and it may not be advisable to implement indicators designed for global comparisons at local, regional or even national scales. Nonetheless, indices such as those developed by the World Economic Council (WEC), World Economic Forum (WEF) for ranking countries and indicator sets such as the International Atomic Energy Agency's Energy (IAEA) Energy Indicators for Sustainable Development (EISD) may still be useful guides to decision-makers when designing their own national measurement tools provided the indicators fulfil certain criteria. Through interviews with key energy practitioners and decision-makers in energy development in Iceland and an extensive literature review, we identify the challenges faced in sustainable energy development in Iceland. We assess the suitability of indices proposed by organisations like the WEC, WEF and IAEA for reliably measuring the sustainability of energy development in individual countries like Iceland. We find that the indices and indicators evaluated suffer from commonly cited limitations including lack of methodological transparency, misalignment with sustainable development principles, inappropriate metrics, lack of clear targets, failure to capture socio-ecological impacts at different scales and failure to meet the interest of the target audience. Hence, they do not facilitate effective measurement of progress towards sustainable energy development for individual nations. Important issues relating to energy affordability and equity, environmental sustainability, efficiency, energy security and renewables are neglected by the indicators in all cases, although it should be said that the IAEA indicators are more comprehensive in their coverage of energy efficiency, renewables and environmental sustainability. In each case the indicators are at best only partially relevant to the Icelandic case, due to the country's unique energy mix, environment, economic structure and size and standard of living. By identifying their limitations and by examining them in light of criteria for good indicators as recommended by the Organisation for Economic Co-operation and Development (OECD) and International Institute for Sustainable Development (IISD), we contribute to the discussion on the value and validity of indicators, indices and frameworks. Knowing the potential pitfalls, we are in a better position to design a more effective measurement tool. We conclude that a more comprehensive, multi-level, context-specific measurement tool would be needed for measuring national energy sustainability in Iceland and would require methods that allow broad public participation.