For some Icelanders, in a country whose inhabitants have survived 1,100 winters without central heating, the environmental costs of aluminium smelting are worth paying if the alternative is a return to a life in grass-roofed huts.

To many, that choice does not feel far-fetched. Andri Snær Magnason’s grandfather, for example, worked continuously on the land and sea in order to survive. As the author of Dreamland recalls, “my family caught fish, burned driftwood, milked cows, and herded sheep. Food was life for twenty to thirty people in a house of 1,400 square feet. Everything edible was cut and dried: One sheep represented a month and a bit of human survival next winter. That was their reality”.

The vitality of that living memory is one reason debate about Iceland’s economic future  seems to have been limited to a stark choice: sell the country, body and soul, to global energy and extractive interests – or go back to those huts.

The search for a third way was one underlying theme at last week’s Poptech in Reykjavik on the theme “Toward Resilience”.  My invitation (from Andrew Zolli) to take part afforded a welcome opportunity to re-connect with a country confronted by an agonising choice: “eaten-alive-or-growing-to-live?”.

A new lesson from this visit: the imposition of heavy industry onto a fragile ecological-social situation is an easier sell when the alternatives on offer can be portrayed as feeble. Successive politicians have played on the fact that an aluminium smelter is large, solid and reliable – whereas small-scale farming, picking moss, or selling herbal tea-bags in the airport shop, are not to be taken seriously as the basis of an alternative economy.

“People want to know that next year will be all right, and the year after” Magnason explains. “A longing for security, and fear of change and uncertainty, make people hold fast to the existence they know, however unreasonable it may be”. Put like that, Iceland’s struggle is an example of a dilemma faced by communities the world over: how to have confidence in a future based on social and environmental assets that are real – but intangible, and unmonetised.

To the visitor arriving on a cheap Icelandair flight for a short visit, the country appears to be well-off. But, as Magnason puts it, “a particular myth is fixed in the mind of the nation, the myth that we are a poor little country that needs something big to save us”.

This fear – that success may be fleeting – is not irrational. Iceland’s tourism business is booming, for example, but only because a return ticket from London today costs no more than a week’s wages for a Brit with a job. This is not a solid market. Low-cost air travel, whose business model is based on high passenger volumes and low energy costs, is unlikely to survive for long in the age of energy descent that is upon us.

Filling Iceland with server farms running on ‘clean’ energy is another business idea that, although it must sound cool  in a pitch to VCs in California, is likely to be constrained by the messy realities of energy descent. Despite its name, Cloud computing is extraordinarily resource-intensive. Whether or not the energy to run its servers can be sold as being ‘clean’ as well as cheap, the escalating costs of its infrastructure will constrain the growth to infinity that most excites potential investors.

Icelanders, who have no choice but to be creative and entrepreneurial, will of course be able to innovate replacement enterprises if tourist numbers decline, or cloud computing disappoints. But that’s not the point. The challenge is to win over a polarised society, now, to the idea that that a mosaic of small enterprises can provide the same security as is promised by resource-intensive heavy industry.

Iceland’s dilemma is not unique. The mind-set of people living in tough conditions has often been accompanied by human and ecological devastation. For more than two centuries in Australia, for example, the conflict between incoming settlers, and aboriginal peoples, was framed in terms of the doctrine of terra nullius, a Roman legal term that means “land belonging to no one,” or “empty land.” As the writer Adam Kahane recalls in his book Power and Love, it took 200 years after the first settlers arrived for the High Court of Australia to rule that its citizens had to work out a new way of living together with the indigenous people and land that had always been there.

“The two main ways that people try to solve their toughest group, community and societal problems are fundamentally flawed” writes Kahane;  “they either push for what they want at all costs, or try to avoid conflict completely and sweep problems under the rug in the name of a superficial peace”.

A post-2008 project to re-write Iceland’s constitution seems to belong in Kahane’s second category. Although much-trumpeted as “the world’s first crowd-sourced constitution”, the main outcome of this process has been a draft document of more than 700 pages that was submitted to parliament more than a year ago – and has not been heard from since. Even its authors are in the dark about what is happening to it.

I asked my cab driver how on earth such things could be kept secret in such a small country. ”Carefully”, was his reply.

A lack of open-ness (and a visceral  distrust of lawmakers) aside, the bigger problem with a written constitution is that Iceland is confronted by dilemmas, not by black-and-white alternatives. A written set of principles, on their own, will not foster the trust that will be needed among all citizens if Iceland as a social-ecological system is to work.

Andri Magnason is especially frustrated by the polarisation of debate. “You are either for electricity, or you are against it. You are for all hydroelectric schemes, or against them. If you admire power schemes built on a small scalet –  supply a city with electricity, like the one on Elliaár – you are accused of being hypocritical if you  refuse to sacrifice the pristine highlands of eastern Iceland in the interests of aluminium smelting”.

What’s needed is surely a conversation, not a contract.

This conversation needs to involve all citizens with all their different perspectives and interests. People who fear for their future economic security future need to know they are being heard. People who are fearful for the fate of the land and ecosystems they love, also need to know they are being heard.

Being heard is not the same as being forced to agree. On the contrary, as Kahane explains, “if we want to get unstuck, we need to acknowledge our interdependence, cooperate – and feel our way forward”.

One can imagine a happy outcome in which Iceland works out a way to regulate her future development. There could be quotas for energy extraction, or for tourists, in the same way there are now quotas for fish. But how to get from here to there?

As Iceland searches for new words, and new conversation formats, to ‘feel its way forward’, there are models and experiences to learn from.  These range from the Truth and Reconciliation Commission in South Africa to the network of water temples in Bali (that Steve Lansing told us about at Poptech) that has enabled farmers to shared water equitably for more than 1,000 years. There are other models, too, such as the  Articulaão do Semi-Árido Brasileiro  (ASA project) that has been building water cistern in the semi-arid north of Brazil.

These are important stories, but complicated ones. I will return to them soon.  [See also “Iceland: eaten Alive or Growing To Live”]