Trust in ultima thules: social capital and renewable energy development in Iceland and Greenland. Part I

Iceland - an independent republic - and Greenland - an autonomous country within Denmark - represent two nations with similar geographical, economic, and historical backgrounds. Isolated from the continents, both are significantly affected by an adverse climate, making their economies dependent on trade and import. Nevertheless, despite their similarities, their national energy patterns differ substantially. Specifically, Iceland covers most of its energy mix with local renewables, whereas Greenland meets most of the energy demand with imported hydrocarbons. This paper investigates the reasons for Greenland lagging behind Iceland in terms of developing renewable energy resources. It hypothesises that, apart from the commonly-mentioned geographical, institutional, and cultural factors, the difference in social capital level has significantly contributed to the countries’ divergent energy strategies. In this sense, Iceland’s higher social capital stock stimulates its renewable power progress, whereas Greenland’s lower social capital level hampers it. To examine this hypothesis, the article constructs a ‘social capital tripod’, which assumes specific geographical, institutional, and cultural factors to be linked to renewable energy development through social capital. The findings demonstrate that Greenland, being dependent on hydrocarbon import, has a significantly lower expected level of social capital than Iceland, which runs mostly on renewables, therefore generally aligning with the research hypothesis.