In 2021 the Reykjanes peninsula erupted for the first time in about 800 years. The active periods for this area can span decades if not hundreds of years making the impacts of volcanic and seismic activity an important topic for urban planning. The volcanic activity is in proximity to critical infrastructure and water resources which poses a significant threat to the surrounding municipalities. The aim is to understand how urban planners can plan for natural disasters and reduce the risk of harm to communities by enhancing resilience during the ongoing volcanic eruptions on the Reykjanes peninsula. This study was conducted through a document analysis of the comprehensive plans from the municipalities in the region and through semi-structured interviews with actors within urban planning and individuals in academia. This thesis shows that when faced with natural hazards municipalities are faced with making difficult decisions where they need to negotiate what risks should be prioritized and where to allocate limited resources towards mitigation. During this process of negotiating risks, tensions often arise from competing interests from different stakeholders, making the issue a wicked problem. The result of the thesis shows that volcanic activity in the Reykjanes peninsula is not prioritized in urban planning and resilience is lacking, especially in terms of geothermal water. The risk associated with volcanic activity has been deprioritized over other natural hazards largely due to the uncertainty associated with volcanic eruptions and the politicalization of its mitigation.

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