Iceland: life on global warming's front line

By Adam Cox and Kristin Arna Bragadottir

REYKJAVIK (Reuters) - If any country can claim to be pitched on the global warming front line, it may be the North Atlantic island nation of Iceland.

On a purely physical level, this land of icecaps and volcanoes and home to 300,000 people is undergoing a rapid transformation as its glaciers melt and weather patterns change dramatically.

But global warming is also having a profound effect on Iceland economically -- and in many ways the effects have actually been beneficial.

Warmer weather has been a boon to Iceland's hydroelectric industry, which is producing more energy than before as melting glaciers feed its rivers.

Climate change, stoked by human use of fossil fuels, has also focused attention on Iceland's energy innovations and created demand for its ideas and expertise in fields such as geothermal energy and fuel technology.

Scientists from Africa to the Americas are exploring what Icelandic universities and energy researchers are up to. And foreign companies are teaming up with the small island's firms.

Two-thirds of electricity in Iceland is already derived from renewable sources -- its plentiful rivers and waterfalls and the geothermal heat that warms 90 percent of Iceland's houses.

Some observers say forward-thinking comes naturally on an island where climate change can already be seen in thawing ice and balmier winters.