When Iceland was first settled in the 9th century it is said to have been covered with trees from the shores to the mountain tops. But due to unchecked sheep grazing and logging for fuel and building materials, the forests have all but disappeared. Now there are few small wooded areas, the biggest one being the forest at Hallormsstaður on the east coast, and Vaglaskógur in the north. A resolution was passed on July 27th 1974, allotting a large sum of money to stop the erosion of Iceland and for reclamation of what had been lost already.
Icelandic flora includes about 470 species of indigenous and naturalized species of vascular plants, including 37 species of vascular Cryptograms, 1 Gymnosperm, nearly 290 species of Dicotyledons and 145 species of Monocotyledons. Icelandic flora is therefore distinctly North European or Scandinavian in character. Because the climate is not an arctic one but a cold-tempered oceanic one, there are relatively few plants of the arctic / alpine species. There is an abundance of grass and moss varieties, which tend to flourish much better here than in similar regions of northern Scandinavia and Greenland.
The most common kinds of vegetation are various types of low-growing shrubs, especially heather, crowberry, bearberry, willow and dwarf birch. Some of the most striking features in the landscape, particularly so in the southwest, are the lichens and green mosses on the lava fields.
Flora of Iceland