UAE has many severe environmental issues that are affecting its economy. First, it has the issue of marine and coastal pollution which forces UAE to control their pollution from oil. As oil is UAE’s main source of profit, controlling their pollution raises prices. Second, UAE is mainly a desert with little plants and animals. It is currently in afforestation, trying to create new forestry. This will help UAE have a bigger variety of physical capital that will allow them to make some of their own products and not import as much. Third, the UAE is slowly getting polluted because of their growing population. A growing population leads to an increase in demand for all basic necessities. This leads to a shortage of goods.
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