When oil prices collapsed household budgets across Iceland in the early 1970s, the country faced a choice that most small, remote nations have quietly avoided: keep depending on imported energy, or build something entirely new from the ground up. Reykjavík chose the ground itself. Within years, a large-scale geothermal district-heating network was running beneath the capital, and town after town followed. Today, more than 90% of Icelandic homes are heated by geothermal energy — a transformation that Prime Minister Kristrún Frostadóttir used as the centrepiece of her closing remarks at the opening day of New York's Climate Week on Monday.

Frostadóttir's speech, and the keynote delivered by Australian Prime Minister Anthony Albanese, framed this year's event against a backdrop of compounding extremes: record-breaking El Niño conditions, wildfires across sub-Saharan Africa, flash flooding throughout Asia, and prolonged heat events in Europe and the United States. "Global weather has always been treacherous," Albanese said, "but those scientific forecasts have come to be." He emphasised Australia's obligations toward Pacific island nations that are already experiencing the consequences of rising seas and intensifying storms — countries that contributed least to the emissions now reshaping their coastlines. What distinguished Frostadóttir's account was its structural candour.

She credited Iceland's energy shift not to geography alone, but to three factors that are rarely found together: sustained political will, financial mechanisms that shielded ordinary households from prohibitive upfront costs, and cross-party consensus that survived multiple changes of government.