Answer
Iceland's climate is moderated by nearby water.
Work Step by Step
Water has a high specific heat capacity when compared to other common materials, and is slow to warm up and slow to cool down. In other words, water gives off and absorbs large amounts of energy for small drops and rises in its temperature.
In the winter, when the air is colder than the water, it is warmed by the water, resulting in a milder winter for Iceland. In the summer, the reverse happens and the water cools off the air, resulting in a milder summer for Iceland.
Also, internal energy is carried in the warm water of the Atlantic current known as the Gulf Stream. The GS flows northeast from from the warm Caribbean, with some reaching Iceland.
This is discussed on pages 290-291, and shown in Figure 15.10.
