Ólafur Ragnar Grímsson, the President of Iceland, just returned to his homeland from China. Why does this matter? Because the trip gave him a way to frame his opening speech at the Driving Sustainability conference, which began today in Reykjavík. Grímsson detailed some of the global challenges he saw there – and explained how Iceland's long shift toward greener sources of energy can play a role in helping all of us.

Turns out, Grímsson has a dry Icelandic wit, which was on display when he noted that Iceland is not a big car producer. This hasn't stopped the small country (population: just over 300,000) from moving its transportation – and other energy sectors – in a greener direction. Grimsson himself has seen Iceland go through a tremendous energy shift within his lifetime: 80 percent of the country's energy was based on oil and coal when he was young but today the country gets about 80 percent of its energy from renewable sources. Even faced with the tremendous challenges he saw in China, Grímsson said he doesn't buy the argument that, "Iceland is small and we can do it here but you can't do it elsewhere." (Read more about Grímsson's speech after the jump.)

Grímsson believes the world's fundamental challenges in the future will be water and transportation, and these both need to be solved within the next five-10 years. He repeated, "within five to 10 years." On Grímsson's trip to China, he saw firsthand the changes that country is going through to shift away from gasoline-based transportation. The interesting thing is that China isn't making these changes to appease the rest of the world, but for itself, and for two main reasons.

First, the glaciers in the Himalayas are melting, which is causing water problems in the surrounding areas. The second reason, totally connected to the first, is that China realizes, Grímsson said, that the greatest source of unrest is social instability. In the past few years, he said, there have been over 50,000 demonstrations over environmental worries and because of the effects of pollution that people can see and feel every day. "As you realize when you arrive in Beijing," he said, "everybody breathes, everybody gets a sore throat, everybody hurts in the eyes, everybody is stuck." Grímsson said Chinese officials know that if they don't act to clean the air now, they will face tremendous social unrest. "These are the reasons that the Chinese don't need any lessons from us that they need to do something about this," he said. Luckily, Grímsson is an optimist, and believes it can be done.

"[China] will do it on a scale that, if we don't start acting now in Europe and the Western world, will shame us and we will face the very serious question in 20 years time of how to catch up with China?" adding that the technologies China will develop in the next two decades will be exported to the west, not the other way around. For now, though, China is looking for help, and Grímsson said Iceland will be China's primary partner in developing geothermal energy resources.

This is just one way Iceland's green energy lead can inspire and help others. Another example is the work Reykjavik is doing to try and become a future European Green Capital. Even if it doesn't win the title, local governments are still changing the reality on the ground. City buses are shifting over to hydrogen and the garbage trucks burn methane made from the trash they previously collected, for example, and the plan calls for every other car in Iceland to be driven by clean, Icelandic energy by 2020.

Iceland is a small country, and this reality makes some of its energy challenges easier to accomplish. Nonetheless, the country is an truly inspiring example of what can be done with enough foresight and planning – and it shows how Beijing could follow in Reykjavík's footsteps toward clean energy. "We have a lot to do," Grímsson said, "and my message here this morning is we can do it."

Our travel and lodging for this coverage were provided by the event organizers.

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