Time for a Coherent Forest Policy – Finally

Calls for native forest protection in Australia started with the lobbying of the Argus and Australasian newspapers as the mid 1860s drought deepened. A century later a second wave of concerned citizens added plants and animals to the list as state governments approved clear-felling public native forests for export woodchips. Half a century after that, the earth’s atmosphere has joined the list.

Through the Australian Constitution, the States hold responsibility for public native forests (three quarters of Australia’s native forests) but disquiet over their degradation through logging has drawn in every prime minister from John Gorton to Paul Keating inclusive. Through successive governments, the Commonwealth created legislation linked to its Constitutional powers over exports and corporations to protect native forests. As the States continued to favour resource exploitation over conservation, protection advocates turned increasingly to the Commonwealth. The Commonwealth, however, failed to build a coherent forest policy. The eruption came on Keating’s watch when his resources and environment ministers brawled in public over Commonwealth woodchip export licences. A furious Keating instigated the regional forest agreement process to abolish almost all Commonwealth powers to protect native forests, after just one go at establishing a comprehensive native forest reserve system. The original science-based biodiversity criteria were ultimately compromised and carbon and water issues were never considered. Incoming Prime Minister Howard signed the agreements with bipartisan support. Today, with the public still turning to the Commonwealth over the Gunns’ pulp mill, the swift parrot and the river red gum forests of NSW, both major parties claim powerlessness.

Despite existing native forest protection, both major parties retain highly influential forestry industry policies. The Commonwealth’s financial assistance for plantation establishment over the last half century has driven unprecedented forestry industry structural change. Menzies started the process with Commonwealth loans and grants for softwood plantations for domestic sawn timber and paper manufacturing. Now, tax effective managed investment schemes drive hardwood planting mainly for woodchip exports. Today, plantations (mainly softwood) provide 80 per cent of the wood processed in Australia to make sawn timber, panels such as particleboard and medium density fibreboard, and paper. This plantation share will keep increasing with Australia’s existing plantation estate able to meet virtually all our domestic wood needs.

With domestic processing now largely plantation based–and generating most forestry industry jobs–logging in Australia’s major native forest regions produces mainly woodchips (80-90 per cent of wood logged). These are nearly all exported, supplying nearly one third of the global hardwood chip trade. By around 2010, woodchip production from Australia’s maturing hardwood plantations is poised to soar. Commonwealth Government projections show plantation supply doubling the chip volume currently exported from native forests. Going into a flat global hardwood chip market, a glut is most likely with Japan’s economy in the doldrums and China continuing to prefer softwood logs. Hardwood plantation resources are now displacing native forests in the Japanese woodchip market (90 per cent of our exports). Not surprisingly, proposals are afoot for new, large-scale native forest market opportunities, namely bio-energy.

While the wedded-to-logging (native) forestry industry seeks new markets, climate change draws new competing interests. The clearing of native forests and woodlands and their degradation – mainly through logging – generates a conservatively estimated 18 per cent of Australia’s annual greenhouse gas emissions: 11 per cent from clearing and 7 per cent from logging (see Australian Greenhouse Accounts; Blakers 2008). These emissions exceed those from Australia’s entire transport sector. Native vegetation anti-clearing policies are in place, and have allowed Australia to come within reach of its Kyoto target while Australia’s fossil fuel emissions have increased by 40 per cent since 1990, the commencement year for the Kyoto target. Bringing the clearing emissions down to near-zero requires further government attention and fairness about financial arrangements for long-term management.

For native forests subject to logging, the recently-released ANU study, The Green Carbon report, provides important new information about the carbon storage capacity of Australia’s south-eastern eucalypt native forests. These forests have an estimated natural carbon carrying capacity of 34,000 million tonnes of CO2-e (CO2 equivalent) that can be realised by halting logging and managing the forests so that they return to their full natural carbon carrying capacity. With Australia’s existing plantations able to meet virtually all our wood needs, whether for domestic consumption or export, native forests are available for immediate climate change mitigation.

Australia is very fortunate. By letting previously logged native forests regrow to their natural carbon carrying capacity, the ANU scientists estimate that they would soak up around 7500 million tonnes of CO2-e over the coming 100-200 years. The actual climate mitigation effect is complex to calculate but significant. Bear in mind that Australia’s emissions are around 550 million tonnes CO2-e per annum (note that emissions are a flow and carbon carrying capacity is a stock, so they cannot be directly compared).

What are the policy implications of this research? Australia is sitting pretty with plantations making possible native forest protection for immediate and significant reduction in our net greenhouse gas emissions. Implementing such a policy requires government managing the last stages of an unnecessarily drawn-out process of plantation resource-driven forestry industry structural change: facilitating plantation processing whilst removing commodity wood supply from native forests and easing the burden on those negatively affected (plantation processors now generate most of the jobs). It also requires government nipping in the bud bio-energy proposals that maintain native forest degradation and compromise severely Australia’s contribution to climate change mitigation. This is about sleeve-rolling-up government engagement as practiced by Peter Beattie, Richard Court and Geoff Gallop as they wheeled in their plantation resources to deliver major native forest protection outcomes.

Rather than travelling this problem-solving path, Commonwealth policy arrangements are near completion that look set to deliver perverse outcomes for forestry industry efficiency, food security and water as well as the climate. The Government’s recent broadening of the tax incentives for plantation establishment will exacerbate the existing hardwood chip glut because the demand for tax minimisation and cheap ways of offsetting fossil fuel emissions far exceeds the demand for wood. Competition for food-producing land to plant water-sucking trees will intensify.

Also of concern is the Government’s proposal to include plantations in its emissions trading scheme whilst ignoring native forests in its climate change mitigation policy. Work undertaken with my colleague Peter Wood indicates that at CO2 prices of just $10.00 to $15.00/tonne (less than the Garnaut Review’s recommended starting price for carbon pollution permits), hardwood plantation owners will receive more money from growing carbon than wood. If plantation owners forego logging their plantations and switch to the carbon market, the wood products industry will turn increasingly to native forests and undermine its competitiveness. Australia’s overall greenhouse gas emissions will increase because native forests are more carbon-dense than plantations and the proportion of usable wood is lower. Left unlogged, plantation trees will eventually die and release decades of stored carbon.

The Government’s land-use policy frame is fundamentally erroneous. Native forests, the less efficient resource for forestry industry competitiveness, are tagged for wood production with lost opportunities for the job they do best: carbon storage. Plantations, the less efficient and less reliable resource for carbon storage, are tagged for carbon storage with lost opportunities for the job they do best: wood supply.

Good policy requires proposals to cover plantations in the emissions trading scheme be immediately nipped in the bud. Calls to use native forests for bio-energy should be treated in a similar fashion. Engaged and with calmness, the Commonwealth can then build a policy that concurrently protects native forests and promotes domestic plantation processing. The Commonwealth created this opportunity; only it can make it happen.

Further reading

Ajani J. (2008), ‘Australia’s Transition from Native Forests to Plantations: The Implications for Woodchips, Pulpmills, Tax Breaks and Climate Change’, Agenda: A Journal of Policy Analysis and Reform, 15(3), 2008 .

Blakers M. (2008), Comments on Garnaut Climate Change Review: Issues Paper 1 Land-use – Agriculture and Forestry.

Mackey B.G., Keith H., Berry S.L. & Lindenmayer D.B. (2008), Green Carbon: The Role of Natural Forests in Carbon Storage.

Wood P.J. & Ajani J. (2008), Submission to the Commonwealth Government on the Carbon Pollution Reduction Scheme Green Paper + Addendum