Tasmanian Forest Agreement 2012: Who is the winner?
On 22 November 2012, the timber industry and environmental non-government organisations released the Tasmanian Forest Agreement 2012 (TFA).
The agreement includes a number of components, the most significant of which are the support for the creation of an additional 504,012 ha of forest reserves, a reduction in the high quality sawlog guarantee from 300,000 m3 yr-1 to 137,000 m3 yr-1, and the third restructuring package for the Tasmanian forestry industry in 15 years.
If the terms of the TFA are agreed and implemented, the Tasmanian Government is expected to receive around $300 million from the Commonwealth to compensate displaced forest workers, payout forest contracts, subsidise restructured operations, and help establish and manage the new reserves. The allocation from the Commonwealth is almost certain to include the remainder of the funds previously earmarked under the Tasmanian Forests Intergovernmental Agreement (IGA) (i.e. around $130 million of the original $261.5 million).
The Tasmanian Premier, Lara Giddings, has also indicated that the Tasmanian Government has commenced negotiations with the Commonwealth for an unspecified additional amount. Despite the chequered history of forest deals in Tasmania, the TFA was portrayed by its supporters as presenting a unique opportunity to overcome the divisiveness and uncertainty that have surrounded the industry and hamstrung the Tasmanian economy.
There are several different types of carbon credits that could be generated by reducing or stopping harvesting in Tasmania's multiple use public native forests (i.e. native forest in state forest areas), the two most important being forest management (FM) credits and Australian carbon credit units (ACCUs). FM credits (and FM debits) are the credits (debits) that will be recorded in Australia's international greenhouse compliance accounts if it accounts for forest management in the post-2012 era.
Reductions in native forest harvesting reduce net forest management emissions, thereby 'automatically' leading to the recording of FM credits (or reduced FM debits) in Australia's accounts. ACCUs are offset credits issued under the Carbon Credits (Carbon Farming Initiative) Act 2011 (Cth) (CFI Act). At present, projects involving the cessation or reduction of harvesting in native forests are not eligible to participate in the CFI. However, there is an expectation that amendments will be made to the CFI Act and regulations to facilitate this in the near future.
Stopping or reducing harvesting in Tasmania's multiple use public native forests has the potential to generate a significant number of carbon credits. Given this, it would have been expected that carbon issues would have been central to the TFA negotiations. From the available public material, this does not seem to have been the case. The negotiations focused on the issues that have defined the positions of the parties involved in the TFA for the past 30 years: the industry representatives concentrated on restructuring assistance and subsidies, while the efforts of the conservation groups were aimed at the creation of new forest reserves.
The object of this paper is to analyse how many FM credits the Commonwealth will receive as a result of the fall in harvesting in Tasmania's multiple use public native forests, and identify the winners and losers of the new agreement.