Frontier Economics / ANU Report: Comparing the value of alternative uses of forests in Southern NSW

Study context and purpose

The NSW Government has recently announced a target of reducing the state’s emissions by 50% by 2030 on 2005 levels. Meeting this target while driving increased prosperity requires the realisation of the cheapest sources of abatement.

Consistent with this commitment, there is an opportunity to expand the role of forests in NSW’s climate strategy by stopping logging in state forests.

The state-owned native hardwood forests in the southern part of New South Wales are harvested and used to produce wood chips and appearance and structural timbers. These forests were significantly impacted by the 2019-20 bushfires including impacts to over 80% of the native hardwood forest in the South Coast and Eden areas.

Frontier Economics and Professor Andrew Macintosh of the Australian National University have undertaken economic analysis to test whether the economic value of the native hardwood forest is higher when it is harvested and used to make processed timber products or when it is left in its natural state to provide environmental and recreational services, including carbon abatement. This analysis focuses on the Southern and Eden Regional Forest Agreement (RFA) areas.

Based on conservative assumptions, the study found stopping native forestry in the Southern and Eden RFA areas would produce a net economic benefit to the state of approximately $60 million, while also reducing net greenhouse gas emissions by almost 1 million tonnes (Mt) per year over the period 2022-2041.

Key findings of the report

  • There are net benefits when native forest logging ceases. Sufficient supply of high quality native logs is no longer there and the industry is shifting to harvesting smaller logs that produce lower value wood products .
  • Stopping native forest harvesting will generate significant carbon abatement, which will contribute to addressing climate change. Stopping logging in the Eden and Southern RFA regions represents the largest single low cost abatement opportunity in NSW or across Australia , particularly in the land sector.  As context, a ’no logging’ scenario would generate more than 3 times more abatement per year for the next 20 years than the largest existing Emissions Reduction Fund project anywhere in Australia.
  • Over the 5 years up to 2020, revenue derived from logging state forests totalled just $2.3 million in total versus $64 million  for the same period from plantation forestry. 
  • The small number of people employed in the industry (ranging between 0.1% and 1.6% of the workforce ) have credible alternative employment opportunities in the region.
This entry was posted in Forests and Forestry. Bookmark the permalink.