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Published on May 11, 2010
Dr Judith Ajani of the Fenner School of Environment and Society at The Australian National University gives this public lecture called 'Australia's forestry crisis: How it happened and what to do' at ANU on 6 May 2010.
Many plantation managed investment companies have collapsed. A pulp mill proposal struggles to find financiers. A stock exchange listed forestry company requests a share trading halt while it tries to sell forestry assets to repay debt. A major Australian company (with forestry a non-core activity) struggles to divest itself of forestry assets. The global financial crisis is a glib explanation for Australias forestry crisis. Todays difficulties stem from the early 1990s when it became clear that Australias plantations, and paper recycling, could do the job of meeting virtually all our sawn timber and paper needs without calling on native forests. Any plantation expansion therefore meant planting for the global market.
Shabby global market analyses underpinned 15 years of hardwood chip plantation investment in Australia. In addition, Australian Government policy support for plantation expansion through tax-effective managed investment schemes worked to frustrate market signals constraining investment to global wood market realities. The poor investment decisions are now bearing down on individual investors, regional communities and the public purse, as well as having implications for land use, water availability and the environment.
In its proposed emissions trading scheme, the Government will issue credits for Kyoto Protocol compliant tree planting to offset fossil fuel emissions. There are lessons to be learned from Australias plantation managed investment experience if we wish to avoid repeating mistakes.
Judith Ajani is an economist at ANU Fenner School of Environment and Society and is the author of The Forest Wars (MUP 2007). She has nearly 30 years of forestry industry research and policy experience in both government and academia. In mid-life, but definitely not crisis, Ajani is using her research into Australias plantation managed investment schemes and climate change policy as bridges into the food-farming and land use sectors.