The President of Iceland describes how his country encountered social and democratic upheaval after the economic crisis of 2008. Over the last three years, by combining wide-scale systemic inquiry into governance and judicial systems as well as a long-standing investment in clean energy and technology, Iceland has been able to bounce back with a remarkable economic vitality.

PopTech: PopTech’s theme this year is The World Rebalancing. What do you see as Iceland’s role in a rebalancing world?

Ólafur Ragnar Grímsson: When you live in a small country like Iceland, a country that is very active globally and economically in distribusting and acquiring innovation; but also a country that’s gone through a financial crisis of historic magnitude, you are almost in a laboratory situation, where you can observe and witness and feel the shift that is taking place, or the rebalancing if you want to call it that.

Ólafur Ragnar Grímsson, president of Iceland, shares his country's experiences with crisis, resilience, and comprehensive national reform. photo by Kris Krüg for PopTech

Over the last few years, President Olafur Ragnar Grimsson has seen disasters both financial and environmental wrack his tiny island nation of Iceland. The Nordic country was at the center of the economic meltdown in 2007, when each of its three major banks collapsed. Since then, Iceland made international headlines when it nationalized its banks in response to the crash, when a massive volcanic eruption grounded airplanes around the world, and for its continued strides towards a 100% clean energy.

Needless to say, that's a hectic couple of years for a nation whose entire population is no larger than 350,000 people. President Grimsson discussed what can be learned from Iceland's example -- chiefly, the importance of putting people before markets and developing a clean energy economy -- in his rousing talk at Poptech 2011.

President Grimsson was invited to talk about Iceland and the financial collapse in 2008 -- an event he says threatened the very foundations of Icelandic society.

Grimsson says there were riots and police had to protect the parliament. But he says Iceland responded by conducting in-depth examinations of all the country's institutions. He says the leaders of the country's central bank were replaced. Parts of tee Government itself were replaced. And he says a special commission conducted an investigation of how other parts of society, including business and the media, contributed to the crisis.

Ólafur Ragnar Grímsson, Rajendra Pachauri, and Bhagwan Chowdhry answer audience questions during a Q&A following the Re:store session at PopTech photo by Kris Krüg for PopTech

Iceland’s President Olafur R. Grimsson said his country is better off than Ireland thanks to the government’s decision to allow the banks to fail two years ago and because the krona could be devalued.

“The difference is that in Iceland we allowed the banks to fail,” Grimsson said in an interview with Bloomberg Television’s Mark Barton today. “These were private banks and we didn’t pump money into them in order to keep them going; the state did not shoulder the responsibility of the failed private banks.”

Iceland's President is turning the landscape into a lab for climate-change research. Over the next two years, a team of scientists will try to inject carbon dioxide--charged water into the basalt beneath the ground through boreholes drilled by a nearby geothermal energy plant. The CO2 will, in theory, react with the porous rock and form a stable mineral that could remain in the rock for millions of years. If they're right, Iceland could not only render itself carbon neutral but also give the world a means of protection from the effects of CO2 emissions until they can be reduced.

"Many people ask me, 'Will this project succeed?'" Grimsson says. "I don't know, but I doubt all these prominent scientists would be spending their time on it if they didn't believe there was a reasonable chance of it succeeding."

This ambitious experiment in carbon sequestration landed in Iceland after scientists from Columbia University approached Grimsson.

photo by Thatcher Cook for PopTech

Ólafur Ragnar Grímsson [ˈoːulavʏr ˈraknar ˈkrimsɔn] ( listen) (born 14 May 1943) is the fifth and current President of Iceland.[1] He has served as President since 1996; he was unopposed in 2000, re-elected for a third term in 2004, and re-elected unopposed for a fourth term in 2008. He is the longest-serving left-wing president in the history of Iceland.