Study on Native Vegetation in Australia and the United States

This study analyzes the impacts of native vegetation clearance in Australia and the United States. It also notes the policy role in determining the incentives associated with the conservation of land and land clearing in those mentioned countries.

Running head: STUDY ON NATIVE VEGETATION IN AUSTRALIA AND THE UNITED
STATES
STUDY ON NATIVE VEGETATION IN AUSTRALIA AND THE UNITED STATES
Name of the Student
Name of the University
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1STUDY ON NATIVE VEGETATION IN AUSTRALIA AND THE UNITED STATES
Introduction
Native Vegetation helps in controlling the pollution in the ecosystem. The well-being
of wildlife depends on this vegetation. Recently, the clearance of the native vegetation is
harming the biodiversity. The clearance can occur due to cutting down of trees, shrubs and
plants. It results in loss of habitats in those areas where the clearing of native vegetation is
occurring and the emission of greenhouse gas rises (Hanley, Shogren & White, 2019). In
recent times, the clearance of native vegetation is increasing at a higher rate than in a
condition where the native vegetation remained socially optimal. The clearance of native
vegetation is found recently more in the United States and Australia (IPBES, 2019). The
essay will be designed to point out the impacts of the native vegetation clearance in two
major economies of the World. The country chosen for the analysis is Australia and the
United States. Even the study will also note the policy role in determining the incentives
associated with the conservation of land and land clearing in those mentioned countries.
Overview of the analysis
Impact of the clearance of native Vegetation in Australia
In the year 2015 to 2016, the Government of New South Wales gave the direction of
clearing around 7000 hectares area of the native vegetation (Soe.environment.gov.au., 2019).
The above reason caused the death of a variety of species living in those areas, and this
further resulted in the loss of population of some species of those concerned regions. The
land clearing is resulting in low rainfall in Australia. This is because of the global warming
effect due to excessive pollution. Recently, Australia is facing adverse climatic variation
because of the emission of the greenhouse effect as a result of deforestation (Pc.gov.au.,
2019). Australia is one of the largest emitters of CO2 in the world. For this reason, in recent
times, Australia is suffering from a water crisis. Water is one of the essential components for

2STUDY ON NATIVE VEGETATION IN AUSTRALIA AND THE UNITED STATES
irrigation purpose. Due to the clearance of native vegetation and forest areas, there is a water
scarcity in the country. This is resulting in the water crisis in Australia that is contributing in
low as well as poor production of agricultural products. This is affecting the health condition
of those habitants living in the country, Australia. The native vegetation clearance is resulting
in the externality because the Australian economy is facing low marginal benefit. Hence, to
reduce the land clearance or especially the native vegetation clearing, the government of
Australia is trying to design some policies accordingly. In this way, the marginal social cost
of the country is increasing (Lawes et al., 2015). Thus, now the marginal social cost of the
country is becoming more than the marginal social benefit leading to the negative externality.
Thus, the clearance of native vegetation is increasing at a higher rate than in the optimal
social situation.
Effect of the clearance of native Vegetation in the United States
In the year 2018, the deadliest fire broke out in the forest of California, situated in the
United States. Around 8527 acres of land was destructed because of the reason mentioned in
the above statement (Carrero & Fearnside, 2011). This led to the clearance of the native
vegetation in many parts of the United States. The smoke, which was generated from the fire,
is creating more fog in the countries. As a result, this is leading to more accidents in those
areas. Even the people who live in the United States are facing a breathing problem. Hence,
this is leading to an increase in health care cost that the publics living in the United States
have to use for the treatment. The rate of mortality in the mentioned country is also rising
because of the mentioned issue (Halofsky et al., 2018). The landowners of those areas are
setting up new properties. This is helping in environmental instability. Thus, causing loss of
biological diversity. Therefore, the country is experiencing the climatic changes. As a result,
the inhabitants of variety of species living in those areas are in danger. Hence, the United
States, marginal benefit is continuously reducing. The external cost associated regarding the

3STUDY ON NATIVE VEGETATION IN AUSTRALIA AND THE UNITED STATES
mentioned causes is also increasing (Phillips, 2019). Hence, this is resulting in the negative
externality, which further leads to the welfare loss of the United States.
Negative Externality
After analyzing the condition of native vegetation in both the chosen countries
(Australia and the United States), it was found that both the economies are facing negative
externalities. When there is a presence of external cost in the market or in the economy, then
the economy results in externality. The negative externality occurs when the social marginal
cost is greater than the marginal social benefit in a country or in a market (Anderson, 2010).
Here, in the concerned cases in Australia and the United States, it is found that due to the
clearance of land, there are many things, which are being affected. This is leading to the
additional cost, which is trying to solve the problems. With the help of a diagram illustrated
below, the negative externality and welfare loss of the mentioned countries can be explained
clearly.

4STUDY ON NATIVE VEGETATION IN AUSTRALIA AND THE UNITED STATES
Cost and
Benefit
Quantity
MSC
MPC
B
A
MSB
Q’ Q
P
P’
C
Welfare Loss
Figure 1: Negative Externality
(Source: As created by author)
The above illustration shows the negative externality, which is caused by land
clearance in the areas of the United States and Australia. The vertical line indicates the cost
and benefit of the countries. However, the quantity is indicated by the horizontal axis. MSB
and MSC are the marginal social cost and marginal social benefit. The Marginal social cost
is known as the society supply. Therefore, it represents the supply curve. While the marginal
social benefit represents the demand curve. Therefore, point A denotes the free market
equilibrium situation where the MSB curve is cutting the MSC curve. On the other hand,
point B represents the socially optimal point. At this point, the MSC curve cuts the MSB
curve. Here, in the aforementioned cases, it is found that external costs like pollution
abatement costs are present. Hence, this leads to higher marginal social benefit than the social

5STUDY ON NATIVE VEGETATION IN AUSTRALIA AND THE UNITED STATES
marginal cost. Therefore, the marginal social cost curve is on the right of marginal social
benefit (Horowitz, 2013). Hence, Australia and the United States are facing distortions in
their environment. Thus, the countries are experiencing in welfare loss.
The various policies of the government of the United States and Australia are
implemented to reduce the external cost initiated by the clearance of land (Fs.fed.us., 2019).
Therefore, the reduction will shift the marginal social cost curve towards the right. As a
result, the socially optimal point shifts from point B to point A, resulting to the free market
equilibrium situation.
Role of policy to reduce the clearance of land
In both the large countries in the World, the government of those mentioned countries
are trying design policies in order to reduce the land clearance as well as to increase land
productivity. Hence, in this way, they are trying to conserve land. Government of Australia is
trying to protect the lands in several parts of the states in Australia. This is initiated to protect
the native vegetation and unique biodiversity of Australia. These protected areas normally
included those areas of national parks and reserves (Wheeler et al., 2013). The federal
department of the environment and energy of Australia manage these policies after
implementation. To control the land clearing in Australia, the government is trying to allocate
more resources by subsidiary policies, encouraging and impose of native vegetation laws
(Climatechangeauthority.gov.au., 2019). While the environmental policy in the United States,
is an action of the federal government to regulate the impact of the environmental in the
United States. The aim of this policy is to limit the degradation of biodiversity and reduce the
social cost of the country. The Environmental Protection Agency (EPA) regulates air
pollution as well as water contamination. This also contributes to reducing global warming as
well as eliminating the use of gasses (Simmons et al., 2018).

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Conclusion
From the above paper, it was found that recently the worse climatic condition faced in
Australia is a reason for native vegetation clearing. The United States has experienced
welfare loss because of the clearance of land. The United States, as well as Australia's, faced
a loss in their biological diversity. It was seen the government of both the large countries are
taking initiatives in introducing the policy of incentives related to the land clearance and land
conservation so that the economic stability, which was disrupted becomes stable. Hence, the
essay concluded that the marginal social cost was greater than the social marginal benefit of
those mentioned countries. Thus, both the countries are facing negative externality, because
of which the countries are experiencing a loss in their welfare. Hence, both the Australian and
the United States government is taking initiatives in designing the policies in determining the
incentives of land clearing and conservation of land.

7STUDY ON NATIVE VEGETATION IN AUSTRALIA AND THE UNITED STATES
Reference
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