Green economy saved Iceland

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PARIS, Feb. 28 (UPI) -- Icelandic President Olafur Ragnar Grimsson said developing a clean energy economy is good insurance against financial turmoil.

Iceland's banking system collapsed in 2008 at the onset of a global financial crisis still troubling European economies. The World Bank said gross domestic product in Iceland declined 4 percent in 2010 but recovered to a 2.6 percent growth rate the following year.

Grimsson told the Organization for Economic Cooperation and Development in Paris that Iceland's economy was a testing ground for new economic models.

"The development of a clean energy economy is a good insurance policy against long-term difficulties, which inevitably will continue to follow the financial crises of the future," he said.

Grimsson said Iceland derives 100 percent of its electricity production and 100 percent of its home heating through domestic renewable energy resources such as hydro and geothermal power.

A clean economy, he said, helped the country endure the financial crisis. With warming temperatures threatening northern economies, a looming climate crisis gives further credibility for a push for a low-carbon economy, Grimsson said.

"Coming from a country with the largest glaciers in Europe, close to the frozen arctic, Icelanders do not need to attend international conferences to be convinced of the accelerating rate of climate change," he said.

He added that, despite some major economies, Iceland let its private banks fail and rejected austerity measures.