Closing a renewable timber industry for carbon credits is far from 'common sense'

Last week (27/3/19) it was reported on ABC Radio and in the Guardian Australia that Federal Agriculture Minister, David Littleproud, had offered his support to a ‘secret’ Victorian Government plan to close the state’s native forest timber industry in return for carbon credits paid for avoiding timber harvesting. He apparently described the idea as ‘common sense’ and was accordingly given the thumbs-up by the Green-Left media for ‘breaking ranks on [Coalition] forest policy’.

While there is some suggestion that an unknowing Mr Littleproud was set-up by the ‘joint ABC and Guardian Australia investigation’, the Federal Coalition Government can ill-afford its Ministers to espouse such ill-conceived thought-bubbles if it wishes to retain rural support.

As I’m sure the Minister has since been advised, it is far from ‘common sense’ to attempt to reduce carbon emissions by closing a sustainable industry that produces renewable products which store carbon. In fact, it would be counter-productive to the intended aim of mitigating climate change.

This was made clear by the Intergovernmental Panel on Climate Change (the IPCC) in itsFourth Assessment Report in 2007, which noted that “… stopping all forest harvesting would increase forest carbon stocks,but would reduce the amount of timber and fibre available tomeet societal needs. Other energy-intensive materials, suchas concrete, aluminium, steel, and plastics, would be requiredto replace wood products, resulting in higher GHG emissions”. For example, in 2006 the Federal Government’s CRC for Greenhouse Accounting estimated that for the same unit size of product, steel embodies 350-times more carbon emissions in its production compared to timber.

Furthermore, a lack of Australian-grown native hardwood timber would precipitate a substantial increase in our already significant imports of similarly durable and decorative native hardwoods, such as merbau and meranti. These are harvested from tropical rainforests in developing Asia-Pacific countries with often questionable capability to sustainably manage the harvest and regeneration of logged forests. So, meeting Australia’s demand for hardwood entirely from often unsustainably managed tropical forests would only further worsen the climate change mitigation outcome resulting from closingour own native forest timber industry.

In Australia’s fire-prone landscapes, the concept of permanently storing ever increasing amounts of carbon in forests is fraught, and will become more-so if larger bushfires become more frequent under climate change. Timber production – which is restricted to within less than 10% of the nation’s forests – effectively transfers carbon storage from the forest to the community in wood products, thereby safeguarding it from forest fire for variable lengths of service life. At the same time, harvesting creates space in the forest for regenerating young trees to sequester and progressively replace the carbon removed from the harvested forest in logs. If the harvesting is sustainably managed, ie. the annually harvested and removed wood volume is less than or equivalent to the annual growth (gain) in wood volume across the whole forest, then timber production is at least carbon neutral. As the overwhelming majority of Australia’s (and Victoria’s) forests are already reserved, there is no doubt that the current cycle of timber harvesting and regeneration – limited to just a minor 6% portion of the state’s forests – is sustainable. So, … as the native forest timber industry is not a net carbon emitter, it is incongruous that environmentalists portray its potential closure as an emissions’ saving.

Despite these realities, the ‘joint ABC and Guardian Australia investigation’ quoted Victorian Labor Environment Minister, Lily D’Ambrosio, as saying that climate change would drive changes to forest management because Victoria is due to set interim targets in early 2020 to reach net zero emissions by 2050, and that native forests have been targeted as a priority sector. This suggests that the Victorian Government has been so influenced by the environmentalist rhetoric around forest carbon that it is oblivious to the counter-productive reality of what downsizing or closing the local timber industry would actually do to carbon emissions.

The concept of paying carbon credits to landowners to encourage forest protection through ‘avoided logging’ was originally designed specifically for developing countries where there are real problems with illegal, unplanned and uncontrolled timber harvesting due to systemic corruption and/or poorly conceived and enforced environmental controls. As these problems do not exist in developed countries, the unwarranted introduction of a similar forest carbon market mechanism in Australia has been driven by environmental activist groups with a long-held ambition of closing the nation’s native forest timber industry to supposedly ‘save’ flora and fauna.

However, in Victoria, over 90% of the state’s public forests (~ 6.6 million hectares) are either already formally reserved for conservation or are otherwise unusable for timber production for a variety of reasons. Accordingly, as this area is under no threat of being logged, one wonders how it can attract carbon credits for ‘avoided logging’ unless an imaginary threat is contrived. In the 6% portion of the native forests where the Victorian timber industry operates, the threat of logging will also disappear if the industry is closed.

Even if such carbon credit payments were legitimately preventing logging, there is still a question as to whether this does anything to reduce carbon emissions given that timber production in Victoria is sustainable and produces a renewable material with very low carbon emissions embedded in its production and manufacture. Indeed, Australia’s forest industry is the nation’s only carbon-positive industry sector because our forests are bound by legislative controls and regulations that require them to be regenerated after logging, thereby recapturing the carbon removed from the forest in logs or emitted during the harvest and regeneration process. 

The push to evict wood production to manage forests solely for carbon storage also ignores social considerations. Carbon credit payments made annually to the Victorian Government would not automatically stimulate any downstream economic activity. In contrast to this, wood production generates both income for the government plus substantial regional economic activity and employment in forest harvesting, log cartage, log processing, product manufacture and distribution, and retail.

This difference was exemplified during the Tasmanian forests ‘peace deal’ process from 2010 – 13 when it was estimated that $50 – 100 million per annum could be paid to the state government in carbon credits if it ended logging in Tasmania’s wood production forests. This sounds impressive, but pales in comparison to the value of the state’s native forest timber sector which up to that time had been delivering economic activity worth $700 million per annum with 3,500 jobs. It remains to be seen what carbon credits would be worth for Victoria’s native forests in 2020, but to make any socio-economic sense it will need to exceed the value of the state’s native forestry sector which was recently quantified by Deloitte Access Economics as being worth $770 million per annum and supporting 2500 jobs.

Our native forests are constantly growing, retracting and recovering subject to bushfire and this will continue irrespective of whether or not carbon credits are being paid. Undoubtedly for the Victorian Government, being paid lots of money for effectively doing nothing would be very attractive, and popular amongst the inner urban Green-Left demographic which has been conditioned to believe that carbon credits always equate to positive action on climate change. But, as explained above, ending well managed wood production would actually be counter-productive to fighting climate change and would create socio-economic problems by closing or down-sizing one of our few truly renewable and sustainable industries.

Sceptics have long presumed that addressing anthropogenic climate change would create perverse business opportunities which deliver substantial cash flows for their proponents whilst doing little or nothing to reduce carbon emissions. The concept of being paid carbon credits for excluding renewable wood production from well-managed Australian forests may well fit this description. Clearly in the case of Victorian forestry, such payments would not minimise carbon emissions, but would perversely increase overall Australian/global emissions.