Cut emissions, not forests: SERCA calls for visionary new policies to make forests part of the solution to global warming and improving water supplies, not part of the problem.

Australia’s forestry operations are significant contributors to carbon dioxide emissions and the poor quality and quantity of our water supplies. Current forest policies and Regional Forest Agreements were not designed to take account of climate and water issues. Current policies will become more and more unacceptable as climate change bites harder. SERCA advocates new policies that maximise the capacity of native forests to mitigate climate change by storing carbon and improving water supplies. In doing so they will also create significant new income streams from Australia’s forest resources.

SERCA calls upon its political leaders to take up the challenge. The Australian community is demanding urgent action. Market circumstances - especially plentiful supplies of plantation hardwood - provide new opportunities to have a thorough over–haul of an industry that is now in a financial mess, propped up by taxpayer subsidies, damaging to the environment, and ripe for restructuring. It is time to turn it around to become good for the economy, good for employment, good for the environment, good for the regions, and a positive and very significant contribution to addressing climate change.

SERCA’s recommendations:

Recommendation 1: that carbon sequestration in Australia’s native forests be adopted immediately as a major strategy for climate change mitigation, and to improve the quantity and quality of water supplies.

Recommendation 2: that Australia include investment in native forest protection and habitat restoration in Australia’s climate change mitigation strategies, and specifically to supplement the nation’s carbon trading scheme and Australian involvement in global trading schemes.

Recommendation 3: that the Commonwealth require an end to all broad-scale native forest logging, while making special provision for a limited amount of logging for sawlog extraction and tree removal essential for restoration of critical animal habitat.

Recommendation 4: that the Commonwealth require that only plantation timber be used for the export hardwood chip industry, for further processing as pulp in Australia, and for biomass fuel production.

Recommendation 5: that the Commonwealth negotiate with the States and Territories a structural adjustment package for the native forest timber industry, that will underpin new, visionary Australian climate change mitigation strategies for native forests.

Recommendation 6: that the Commonwealth remove taxation concessions for new plantations.

The attached paper draws on information from official sources, academic research, and two recent conferences on forests, water and climate change.

A visionary new plan to enhance Australia’s climate change policies and improve water supplies in southern Australia: proposed by the South East Region Conservation Alliance (SERCA)

SERCA considers that:

· Climate change and water issues are matters of urgent public concern in Australia. Our leaders need to adopt new, visionary and rational policies to address these concerns.

· Australia’s native forests can and must become part of the solutions to both issues, rather than making a major contribution to current problems. Current forest policies and Regional Forest Agreements are now out of date: they are not designed to take account of what are now pressing climate change and water concerns. And they are barriers to earning significant new income streams from the value of native forests as carbon and water storages – a value that will increase as southern Australia moves into a hotter and drier future.

· Intensively logging Australia’s native forests - unnecessarily now given the availability of plantation timber - means foregoing the opportunity to reduce national carbon dioxide emissions by storing the carbon in the trees and soils of unlogged forests.

· Because so many of our water catchments are in forests, policies to improve the sequestration capacity of carbon in native forests will also improve the quantity and quality of our water supplies.

· Logging Australia’s native forests is producing 33,490,967 million tonnes of carbon dioxide emissions a year – the equivalent of emissions from 8.2 million cars – and with a social cost estimated by researchers, using Stern Report calculations, of $3,682 million a year.

· The lost opportunity costs of both carbon and water from logged native forests in NSW alone have been estimated by researchers at nearly $800 million per year. The social cost, estimated using Stern Report calculations, is $561 million for carbon loss alone. To put these figures in perspective, Forests NSW receives $5 to $6 million annually for its sales of pulplogs, which are 90% of all logs taken from its native forests in the Eden Regional Forest Agreement area.

· If we are serious about addressing climate change, we can’t afford to focus solely on fossil fuels, while continuing to overlook the importance of the carbon carrying capacity in native forests, especially in mature forests rather than regrowth. It is time to add the protection and remediation of native forests to Australian strategies for mitigating climate change. We don’t have to wait for new sequestration technology to be developed, as is needed for coal. We can achieve immediate results.

· Maximum density of carbon is reached in Australian forests at 200+ years. Regrowth forests and plantations store significantly less carbon than mature forests. In SE NSW regrowth takes over 50 years to recover 75% of the carbon carrying capacity of mature forest, 150 years to get to 90% - far greater time-scales than allowed for in logging rotations.

· Intensive logging of native forest also has adverse effects on stream-flow, flow duration, especially in summer and going into drought, soil water content, and water quality. For example, soils in 14 year old regrowth forest lose water at a rate of 2.2mm a day, in 45 year old forest at 1.4.mm a day, in 160 year old forest at 0.8 mm a day. As with carbon sequestration, recovery rates are generally many decades longer than logging cycles allow for. In Victorian forests supplying Melbourne’s water it takes 150 years after logging for water run-off to return to pre-logging levels.

· As for carbon, calculations of lost opportunity costs can be done for water. The annual cost of water loss in logged forests in SE NSW has been calculated at $18.56 million. And the water will increase in value as scarcity and quality issues bite harder in a hotter and drier southern Australia.

· In a carbon credit scheme the social cost can be recovered through investments in forest protection and remediation.

Recommendation 2: that Australia include investment in native forest protection and habitat restoration in Australia’s climate change mitigation strategies, and specifically to supplement its carbon trading scheme and Australian involvement in global trading schemes.

· Investments in the protection and remediation of native forests and thus indirectly in improvements in water supply and quality are essential elements of climate change mitigation strategies. For example, through carbon credit trading schemes, in Australia and globally, these investments will provide revenue streams for the States and Territories and private forest owners that far outweigh what they now earn from logging predominantly for the woodchip sector, or could conceivably earn in the foreseeable future.

· Nearly 90% of all native forest logs chipped in SE NSW, Victoria and Tasmania are exported. Australia is the world’s largest supplier of hardwood chips with around one-third of the global market. Thanks to generous taxpayer subsidies for hardwood plantations, Australia now has quantities of plantation hardwood available to process as woodchips for the global market very close to its global market share.

· The quantities of available plantation supplies will triple over the next two to three years, a matter of concern to the financial sector. Building a Tasmanian pulp mill will not alter the fundamental over-supply in the resource base. Australia’s forestry agencies have not succeeded in attempts to sell the much larger total of native forest plus plantation chips into an oversupplied international market and/or to find significant alternative markets for surplus supplies. Nor does the foreseeable future look brighter for them.

· These market circumstances provide the Commonwealth with the opportunity to insist on substitution of plantation chips for native forest chips in order to free up native forests for carbon sequestration. The market barrier to such a substitution is pricing of public native forest supplies by the State forest agencies at levels that are a fraction of the price levels required to cover costs of plantation supplies. Without substitution Australian suppliers will be even more squeezed on price in an oversupplied market, discouraging repeat rotations of plantation crops.

· Restructuring the native timber industry is long overdue. It is not a large or complex task.. Native forestry is a small proportion of the total timber industry. Reliable employment figures are not available, but as an indication, wages and salaries in the woodchipping sector were $55 million in 2004-05, compared with $3005 million in the total forest production industry. Employment has declined drastically with technological change, and the industry’s significance within regional economies is much smaller than it was. Growth opportunities in the regions are in other industry sectors like tourism and specialised food production and in the timber industry’s much larger, more efficient and faster-growing softwood sectors.

· Developing policies for our public native forests that are relevant to new public concerns and new economic realities is straightforward enough. Agreement with the States is necessary, and a structural adjustment package developed for workers and contractors, and presumably compensation for contracted owners of private forest, some regional economic initiatives, and some compensation for the export chip mills with current contracts still to run.

· The recommendations above relate to water issues as they are affected by native forestry. However it would also be timely for the Commonwealth, as part of its water initiatives, to reconsider problems around water uptake for large hardwood plantations. CSIRO research has found that large hardwood plantations use a lot more water than the agricultural production or pasture that they are replacing. (There is a similar problem with tree planting, rather than other revegetation, as part of measures to address salinity due to past land clearance.) There is escalating public disquiet, especially in Tasmania and Western Australia, about the fact that under existing taxation arrangements farmers can’t compete with plantation investment schemes. There is a looming glut of hardwood plantation resource, planted for the woodchip/paper pulp industry, and it will exist even after native forest supplies are taken out of the market.

Recommendation 6: that the Commonwealth, as part of the new water initiative with the States, remove taxation concessions for plantations.