Blue Lagoon, Iceland

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Geyser Strokkur erupting hot water and steam, Iceland.

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With its clean and pristine air, Reykjavík in Iceland is said to be the least polluted capital in the world. This is a view from the Hallgrímskirkja.

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World Heritage-listed Pingvellir National Park is one of the most popular tourist destinations in Iceland.

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"Swimming is our national sport," the tour guide remarked casually to the astonished travellers who stood rugged-up and shivering by the bus. A few Icelanders nodded in agreement, as if this fact were obvious.

This was not the first aspect of Icelandic life that seemed to make no sense. Even before I arrived I wondered how a country so far from everywhere, that spends half the year in darkness, could have one of the highest life expectancies in the world, and could lie second on the Human Development Index (a global measure of the standard of living).

But if Iceland seemed an exotic and unusual place from a distance, the mystery deepened when I arrived.

Keflavik airport in the southwest is surrounded by the lava wasteland that covers 64 per cent of the country. The sun was still high in the sky near midnight, a faint smell of sulphur hung in the air, and around me were ads for volcano tours and restaurants serving rotten shark and lamb testicles.

Where on Earth was I? I was not surprised to hear that astronauts have used Iceland to prepare for visits to the moon.

Rifting along

Iceland straddles the edges of the European and American tectonic plates, and as the plates tear apart, the country is literally growing. A vast valley is opening in Þingvellir National Park in the country's southwest, with sheer cliffs creeping slowly apart on either side.

The rifting plates also make Iceland one of the most geologically active countries in the world. A four-year volcanic eruption sculpted the island of Surtsey off the southern coast, which emerged from the ocean late in 1963.

Hot springs and geysers dot the landscape, and with sporting fields often covered in snow or engulfed in darkness, it's not surprising Icelanders choose to swim year-round in naturally heated pools.

The Blue Lagoon, a 30-minute bus ride from the capital Reykjavik, is the most famous of Iceland's thermal baths. There, men, women and children use white silica mud from the lagoon to cleanse their skin.

The sight of visitors emerging from the steaming waterhole, set amongst lava flows and ice, their faces covered in dried white silica and their bodies dripping blue, is truly alien. The only drawback to this beautiful scene is the smell of sulphur at shower time.

Endless energy

But most interesting to me was Iceland's world-leading position on renewable energy. In fact, Iceland has 72 per cent of its power derived from renewable sources, mostly hydroelectric and geothermal plants.

Coal imports ceased more than 50 years ago, and the government plans to make the whole country "Carbon Neutral" by 2050.

Travelling around Reykjavik - one of the cleanest capital cities in the world - is literally a breath of fresh air.

Commuters walk, ride bikes, or catch hydrogen-powered buses. And Icelandic New Energy Ltd. is aiming to create the world's first hydrogen economy by eventually powering the country's ageing fishing fleet.

"What we are doing up here ... shows what you can achieve when you have the will to change," said company spokeswoman, Maria Maack. "In Iceland, we do not have our own car manufacturers, therefore we are highly dependent on consumer choices all over the world and the common push for change."

"The speed of shifting to hydrogen in Iceland depends on how fast the development of the technology will move. Only mass production will push the prices down," adds Maack. "This is the largest obstacle to the general introduction of hydrogen technology on the world market."

Flying is the easiest way to get to Iceland (though the Norwegians on our tour, in true Viking fashion, had braved the Norwegian Sea in yachts) and the Icelandic government offsets staff flights by planting trees through the Iceland Carbon Fund.

Around one million trees are being planted each year, and while one Icelander I spoke to saw this as akin to "saying Hail Marys to atone for your sins," it is a positive step.

Schools are awarded prizes for meeting their own environmental goals through the "Green Flag Program". One primary school we visited on the Snaefellness peninsula, a day trip from Reykjavik, built a dam to generate electricity for greenhouses. They also built windmills and captured solar energy.

In future, even booking tours and accommodation in Iceland could come at a lower environmental cost, with Internet companies showing interest in moving energy guzzling server farms to the country due to its cheap and renewable electricity. This is being seen as a more environmentally conscious method of creating jobs than the aluminium industry that generates much of Iceland's wealth and creates Iceland's oversized carbon footprint.

Stunning scenery

Hands-down, Iceland is the most expensive country I have ever visited. With such 'sumptuous' dishes as rotten shark on the menu - unless odd meals appeal - you go to Iceland for its natural beauty. Mountains and truly imposing glaciers smother the horizon.

The Gulfoss waterfall, part of Iceland's "Golden Circle" with the massive Kerið volcanic crater, the Geysir hot springs field (from which all geysers get their name) and the spectacular Þingvellir National Park, literally appears from nowhere, carving an enormous gorge into the barren geography.

Icelanders are genuinely passionate about their beautiful country, and it is easy to fall in love. I could not have been happier gazing at the awe-inspiring mountains surrounding Reykjavik harbour and eating celebrated Icelandic ice cream (who knew?) at midnight with the sun still up in zero-degree temperatures.

Perhaps because Icelanders are from isolated, water-locked countries with largely unpopulated interiors and swimming as a national sport, or perhaps I was invigorated by the sense of escape, of fleeing to the opposite side of the Earth. But this was a country I fell in love with almost instantly.