Forests and Climate Change

At a time when the rest of the world seems to be finally waking up to the significance of forest management in climate change policy, forest managers, including Tasmania’s, seem determined to turn a deaf ear. While the use of fossil fuels must be drastically reduced if we are to avert dangerous climate change (limiting global warming to less than 2oC), greenhouse gas emissions from misuse of land (especially deforestation, forest degradation and peat drainage) are so large that they, too, must be constrained if we are to succeed.

When the Stern Report came out in 2006, about 17% of global emissions were attributable to ‘deforestation’ (the additional contribution from forest degradation – such as logging native forests or converting them to plantations – was ignored). A recent article by Pan et al. in Science (see Scienceexpress, 14 July 2011) confirms that forests are larger stocks and sinks than generally appreciated.

The following diagram is taken from the latest Humane Society International ‘Truth in Targets’ Special Bulletin series (see more on this, below). It shows that, for the European Community and typically for developed countries, the forestry sector plans to continue to increase net emissions on a ‘ business as usual’ trajectory, frustratingly indifferent not only to the planetary woes but also to the potential for their sector to contribute significantly by reducing emissions instead of increasing them.

The key opportunities for forest managers to make timely and effective contributions to global attempts to avert dangerous climate change are:

  • to hold onto existing terrestrial carbon stores, especially in carbon-dense forests (abandon or delay logging plans and improve fire control)
  • to allow regrowth forests to keep regrowing (abandon or delay logging plans and improve fire control)
  • to turn around degradation of woodlands attributable to unsustainable farming practices (introduce sustainable farming practices)
  • to establish more plantations (although the value of doing this is much reduced if they are harvested on short rotation).

Time is of the Essence

All four options are obviously relevant in Tasmania. The key opportunity we have, however, is to act swiftly. Foresters are wont to claim that, over a few centuries, carbon fluxes in forests even out. While this has an element of truth about it, the inescapable reality is that logging always involves emissions – and logging big, wet forests involves lots of emissions. Subsequent regrowth can recover only some of those emissions over the next century. Likewise, the foresters like to claim that, given a century or two, mature wet eucalypt forests will revert to rainforest and, meanwhile, are at some risk of destruction by fire.

Avoiding dangerous climate change, however, is an urgent problem – we have targets for emissions reduction for 2020 (less than 10 years away) and 2050 (less than a single regrowth rotation). On these tight timescales, avoiding emissions by not logging wet forests is always going to be a good thing. Holding on to carbon-dense forests for these few decades, notwithstanding the risk of fire or of them becoming rainforest, is a sensible policy response. Most of the progress made so far in reducing emissions in Australia is attributable to reducing rates of land-clearing, mainly in Queensland, but the same opportunity exists to make further progress by reducing rates of logging in forests, especially in public native forests in Tasmania.

The decision by Gunns to exit native forestry in Tasmania provides a genuinely historic opportunity for Tasmania to make its contribution to addressing the world’s climate change problems – by permanently reducing the scale of the logging industry, at least to its post-Gunns level, while keeping it away from carbon-dense forests. This would obviously involve some trauma for Forestry Tasmania.

In the so-called Tasmanian Forests Statement of Principles developed last year by those involved in negotiating a framework for native forest management without Gunns, the ‘climate change’ Principle states: ‘seek funding for improving carbon outcomes as a result of delivering these Principles’ – which, frustratingly, is not a principle at all.

By the time Bill Kelty had helped them develop their ‘Signatories Agreement’ in June 2011, all mention of climate change had slipped from the text. This is curious in that, when Mr Kelty met with the TCT as part of his introductory series of stakeholder conversations, he identified two contributions that the Commonwealth was keen to make to implementation: payment for climate change mitigation and support for regional development.

Meanwhile, forest carbon management and climate change impact mitigation continues to be a matter of considerable interest both nationally and internationally. The TCT continues to keep somewhat abreast of such things through our longstanding relationship with Humane Society International (HSI). At the national level, policy and legislative developments continue to stagger on in the aftermath of Malcolm Turnbull having lost the leadership of the Liberal Party, over the issue of whether or not to support the Rudd government’s emissions trading system (ETS) legislation, the Climate Pollution Reduction Scheme (CPRS), which the Greens would not support. HSI, as part of a loose alliance of environment groups and NRM committee networks, had been intimately involved in the development of the ‘agricultural offsets’ chapter of this legislation, where their reward was to see ‘avoided deforestation’ included as one of the Coalition’s offset amendment proposals that were accepted by Labor.

The legislation was subsequently abandoned, to be replaced by a fixed-price preliminary phase of a second-generation ETS (otherwise known as a carbon tax) and a separate carbon farming initiative (CFI). Gratifyingly, the CFI includes all the elements of the ‘agricultural offsets’ chapter from the old CPRS legislation, despite being Coalition-originated: the clear intention of the Gillard government being to tempt support from the Coalition for CFI legislation, by serving up a proposal that is virtually indistinguishable from its own ‘direct action’ approach to addressing climate change and offering some opportunity to a wide range of landholders; the political difference being over where the money comes from – either part of the revenue from a new tax (Labor’s ETS) or unspecified budget savings elsewhere (the Coalition’s ‘direct action’).

In anticipation of the original CPRS legislation being enacted, last year the government set up an expert-based Domestic Offsets Integrity Committee (DOIC) to develop, evaluate and approve methodologies, for authorisation by the Minister, that can credibly identify land carbon content gains from land-sector abatement activities, for the purpose of calculating eligibility for benefits (anyone can propose a methodology for possible approval). DOIC continues, despite the CPRS legislation having lapsed, and is quietly churning out approved methodologies, its latest two offerings being for: ‘permanent plantings of native trees’ and ‘manure management for intensive piggery operations’. For more info, go to:

Despite repeated attempts, HSI had failed to get explicit commitment to including ‘avoided forest degradation’ into any offset, CFI or direct action package as part of the ‘avoided deforestation’ commitment: the critical innovation being the capacity for carbon markets to compete with wood markets for access to and control of existing native forest wood/carbon resources. Given the known trenchant opposition of the native forest logging industry to any such competition, absence of written confirmation had been a worry.

It is thus very encouraging to see the following commitment from Alex Gerrick, Chief of Staff for the Hon Mark Dreyfus, the Parliamentary Undersecretary for Climate Change and Energy Efficiency, in recently responding to HSI correspondence seeking written reassurance. His letter says, in part:

You raise concerns about the eligibility of certain land sector abatement activities including degradation of native forests. The CFI provides incentives for land managers to increase carbon sequestration in the landscape including through reforestation, managed regrowth, revegetation and protection of native forests through avoided deforestation and degradation…

The definition of the ‘native forest’ in the CFI legislation in no way limits the eligibility of abatement practices such as avoided native forest degradation.


Now we have to persuade DOIC, and the sceptical officials who support it, to develop suitable ‘avoided’ methodologies. The difficulty with ‘avoided’ methodologies is that the gains do not come directly from the property where management choices are being made but from overall reductions in activity as opportunity diminishes. ‘Avoided’ methodologies have to address three issues not required of renewable substitutes:

  • Additionality – payment must be for an incremental gain – not something that was going to happen anyway; the common example: if a landholder has been paid a biodiversity benefit for covenanting a piece of land, can they be paid a second time for the carbon benefit of that same decision? The answer is, if the landholder holds the carbon rights, yes, they can be paid. This is consistent with the emerging thinking about paying landholders for maintaining the flow of ecosystem services from their land (biodiversity conservation, water flow and quality, carbon content, landscape value – whatever the wider community is prepared to put a value on). At present, this issue has not been resolved and those involved in carbon policy have a bit of ecosystem catching up to do.
  • Leakage – to justify payment, an absolute reduction in emissions must be identifiable to match the reduction in opportunity for emissive activity; the common example being: what use is a decision by one landholder to forego an opportunity to log their forest if the frustrated logger simply goes next door and does the same thing – the atmosphere sees no benefit, so no payment should be made. This is a serious and valid consideration. To create eligibility for benefits, the responsible government (in Australia, that’s a state government) has to have a system to ensure that any reduction in availability of forests for logging is reflected in a matching decrease in logging activity. In Tasmania, we have the Forest Practices System with the capacity to deliver such an outcome but, as yet, no policy framework to do so.
  • Permanence – it’s a waste of money to pay for keeping a forest intact if it will be gone sometime into the future. The new federal legislation sets a prudent 100 years as the time horizon for worthwhile maintenance of a carbon store – which should render ‘whisky-preaching’ voluntary carbon schemes (offering money for foregoing logging for periods as short as 20–25 years) thankfully obsolete. There several conventional ways to deal with this problem: setting up trust funds so that income flows only as long as forests stand; insurance; creating an obligation to buy credits to cover losses; prudently withholding credits to match risk. Having a trust fund is the easiest way forward while things are getting started.

The Commonwealth’s July announcement of its Carbon Farming Initiative, as part of the broader Clean Energy Future Plan, has clarified the situation to some extent (see There were six separate ‘land and biodiversity’ measures (with total budget allocation over four years, July 2011 – June 2015):

  • Carbon Farming Initiative ($193m)
  • Biodiversity Fund ($573m)
  • Carbon Farming Futures Program ($274m)
  • Carbon Farming Initiative Non-Kyoto Carbon Fund ($98m)
  • Regional NRM Planning ($40m)
  • Other land and biodiversity measures ($15m).

The critical area of remaining uncertainty is how ‘avoided forest degradation’ – foregoing logging opportunities – will be dealt with. The CFI includes only those activities that are eligible for inclusion in estimating contributions towards Australia’s international target under the UNFCCC Kyoto Protocol (which includes land-clearing and deforestation). Australia currently chooses not to include ‘forest management’ in these calculations but that could change, depending on what decisions are made at the next Meeting of the Parties (in Durban, in December this year). In other words, compensation for not logging forests is currently only available from the ‘biodiversity fund’ and the ‘CFI non-Kyoto carbon fund’ – and the rest of Australia would be unamused if ‘biodiversity’ was to be used to justify paying off Tasmania for not logging big swaths of forest – especially as there would be a clear carbon emissions gain. NOTE TO EDITOR – THIS SENTENCE IS NOT CLEAR TP ME, PETER

Gunns’ decision to exit the native forest industry provides a historic opportunity for the state government to at least halve the rate of logging of public native forests – and hence emissions – in a way that could ensure eligibility for benefits from the CFI – if only the rules are set properly in Canberra and Hobart. That this is neither a key component of the ‘Signatories Agreement’ nor of the ‘Intergovernmental Agreement’ is deeply regrettable and impossible to comprehend. Rather ominously, clause 47 of the IGA states:

The Governments will continue to discuss issues around the treatment of any potential carbon offset opportunities that may arise for Tasmania from the creation of new formal reserves and/or the reduction in annual native forest sawlog production as a result of this agreement. In particular, the Governments will work together to examine the potential opportunities under the Biodiversity Fund arising from increased formal forest reserves.

Meanwhile, internationally, things look equally unclear. I, (for HIS), and Peg Putt, for The Wilderness Society (TWS) and now for Global Witness (GW), have been attending quarterly meetings of the UNFCCC. Although Peg’s contract with TWS has not been renewed, as part of the ongoing purge following the change of management last year, she will be continuing the forests and climate change work for Global Witness.

Our engagement began in the lead-up to the 2007 UNFCCC Conference of the Parties (COP) in Bali which resulted in a commitment to reducing deforestation, from the Coalition of Rainforest Nations, being expanded to include reducing forest degradation as well. A Bali Action Plan (BAP) was adopted which included a paragraph, ‘b(i)(iii) reducing emissions from deforestation and forest degradation in developing countries (REDD); conservation, sustainable management of forests, and enhancement of carbon sinks;’ known as ‘REDD+’. This was a hugely significant breakthrough as it expanded the scope of a potential financial mechanism to embrace states and landholders who not only stopped clearing forests for agriculture (e.g. soya beans or palm oil) but also degrading forests (e.g. logging for industrial wood supply).

Our efforts to get ‘avoided forest degradation’ into Australian – and Tasmanian – forest carbon policy are aimed at trying to ensure that policy for developed countries is harmonised with this REDD+ policy framework for developing countries. The current national carbon policy situation is beholden to the provisions of the 1996 Kyoto Protocol to the UNFCCC – when Senator Robert Hill, on behalf of the incoming Howard government, notoriously secured international agreement for Australia to set a national emissions reduction target for 2012 of 108% of 1990 emissions, while all the other developed countries – except Iceland – made commitments to reduce emissions.

What was really good about ‘Kyoto’, however, was that Australia was the only developed country able to contribute to its target by reducing land clearing – the Howard government went full steam ahead developing gas and coal exports, with a substantial growth in domestic emissions, while making Queensland and NSW pastoralists bear the burden of reducing emissions by constraining land clearing. This delivered a superb result for Australian biodiversity by taking much of the heat out of rampant land clearing in pastoral regions – to the somewhat stunned amazement of the graziers involved, who couldn’t quite believe that a Coalition government had done this to them.

The unfortunate bit was that, unlike the pastoralists, the forest industry did not lose its grip on the climate change game. An obscure part of the Kyoto Protocol, dealing with LULUCF (land use, land-use change and forestry), allowed developed countries to choose whether or not to account for net emissions from ‘forest management’ (the difference between emissions due to degrading anthropogenic activities, such as logging, and sequestration due to trees growing within ‘managed lands’) when reporting progress towards meeting their emissions reduction targets. Surprise: most countries with negative-forest management numbers elected not to account for the emissions. Inclusion of this ‘see no evil’ accounting rule in the Kyoto Protocol was a huge lobbying victory for the forestry industry.

Only those intimately familiar with the habitually secretive and deceptive nature of the forestry industry can readily understand how such a perverse accounting rule could be accepted by the wider international community. Indeed, the so-called LULUCF rules are generally regarded as so arcane that senior negotiators on national delegations to UNFCCC talks gladly leave it to their ‘specialists’ to negotiate among themselves – with predictably perverse results.

When the Kyoto Protocol was signed in 1996, it established a five-year ‘first commitment period’ (2008–2012) whereby those emissions reduction targets had to be met by the end of the period – i.e. by the end of next year. Much of the angst around current UNFCCC meetings is over efforts to get agreement to fresh commitments for a second period (from the beginning of 2013). While mainstream negotiators have been wrestling with the rapidly widening gulf between current voluntary commitments to control emissions (through further cuts to emissions by developed countries and, for developing countries, to moderate rates of growth in emissions), LULUCF negotiators have been trying to stitch up new, even more perverse accounting rules for the forestry sector.

The current proposal is that developed countries should each be able to set their own ‘forward-looking baseline’ which represents expectations of future emissions based on current policy settings. That is, as long as countries do what they say they intend to do, even substantial increases in emissions would be accounted as zero – and, really cheekily, any failure to emit as much as planned would earn accounting credits, even if actual emissions were still increasing. What the forestry industry across most of the developed world hopes to get away with is illustrated in the diagram at the beginning of this article – strong growth in emissions under ‘business as usual’ policy settings would be regarded as zero emissions for accounting purposes when it came to calculating progress towards meeting national emissions reduction targets.

Not surprisingly, developing countries are rather unamused at the ‘do as I say and not as I do’ approach, whereby their REDD+ projects are expected to operate to much more prudent and sensible accounting standards than are the forestry agencies of developed countries. HSI’s ‘Truth in Targets’ bulletins are designed to exacerbate this source of resentment, with a view to frustrating adoption of such perverse accounting rules at the Durban COP, coming up in December. They advocate a profoundly simple and readily available alternative – of using land-based rather than activities-based approaches to reporting and accounting. Land-based accounting uses much the same data sets to estimate changes in carbon content of landscape components, regardless of the anthropogenic activities or natural processes that caused such changes.

But getting a dog to drop a bone is far easier than getting a logger to abandon a perverse subsidy. It is thus not altogether surprising that the IGA simply commits to more talking – but there is a pressing need for governments to agree on a specific carbon package that would allow Tasmania to benefit from the carbon emissions reduction attributable to reserving large swaths of forest while halving the rate of logging.

Remember, just because Tasmania might decide to reserve these areas for ‘high conservation value’ reasons, there’s no policy or regulation that says Tasmania can’t derive a carbon benefit that reflects the emissions reduction associated with the reservation decision. All Tasmania has to be able to do is clearly identify that an associated reduction in logging occurred – a simple job for the Forest Practices Authority in approving and certifying Forest Practices Plans.

Alistair Graham