Australasian Science: Australia's authority on science since 1938

Tasmania’s Logging Industry Cut Down to Size

By Ian Lowe

A study has found that Tasmania’s forestry industry “is not economically viable”.

Forestry talks in Tasmania have provoked two Canberra observers to calculate the cost to the community of subsidising the logging of native forests. Richard Denniss, who heads the Australia Institute, and Andrew Macintosh of the Australian National University’s Centre for Environmental Law, have concluded that Forestry Tasmania “is not economically viable”.

The figures are devastating. The semi-independent agency has received $100 million in subsidies from the Commonwealth government in the past 6 years but has still been losing about $100 million per year and has an unfunded superannuation liability of another $100 million. The state government recently advanced the agency $100 million to keep it afloat.

Macintosh and Denniss suggest that the reason for the continued public support is a perception that native forest logging is crucial for Tasmania’s economy. A recent Australia Institute poll confirms that theory. Those surveyed in Tasmania thought, on average, that forestry accounted for about 30% of the state’s economic activity and about 20% of its workforce. The actual figures are about 3% and 0.5%, respectively!

But these are the figures for the entire industry, including plantations that account for about half the production. This means, as the report put it, that logging of native forests is “little more than a footnote in the state economic accounts”.

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The recent report by the Climate Commission shed significant light on the heated debate about Australia’s response to climate change. The Critical Decade: International Action on Climate Change was launched in Canberra by former Liberal senator, Robert Hill, who now chairs the Cooperative Research Centre for Low-Carbon Cities.

Hill’s presence reminded me how far backward the Liberal Party has moved since he retired, with some recent senators from his home state of South Australia actively spreading mis­information about climate science. As environment minister in the Howard government, Hill went to the Kyoto climate change conference as leader of the Australian delegation.

The report’s main point was that the world is now tackling climate change seriously, despite the gloom when the Copenhagen conference failed to reach a new legally binding agreement. Ninety countries, including every major economy, are taking active steps. In most cases there is a mix of pollution pricing, regulation, renewable energy targets and measures to stimulate investment. While most major nations studied have a carbon price in existence or planned, every one of them has a renewable energy target and energy efficiency regulations. Most also have vehicle emission standards, an area of policy failure in Australia.

The analysis was a reminder that the local obsession with the carbon price is completely misguided. Only the deluded could think that a carbon dioxide price of $23 per tonne would either change investment behaviour by itself or wreck the economy – especially when most energy-intensive industries are subsidised. Efficiency standards, renewable energy targets and the Clean Energy Finance Corporation will do much more to curb Australia’s greenhouse gas emissions than the modest pollution charge.

The report was also a reminder of Australia’s significance. We are one of the “20 carbon heavyweights” who together account for 75% of the world’s carbon dioxide production and the fifteenth largest emitter of all nations. That ignores the additional contribution made overseas by Australian coal, or the even larger impact it will have if expansion plans occur.

Globally, the past few years have seen a massive investment in renewable energy supply. Hill commented at the launch that he had been told by a minister that solar energy was uneconomic, yet we are now seeing hundreds of billions invested in the technology.

An interesting test case is looming in Hill’s home state. The two old coal-fired power stations in Port Augusta are to close, and there is a vigorous debate about the replacement supply technology. While the state government has been supporting a combined-cycle gas power station, the Repower Port Augusta Alliance has developed an alternative scheme to build six solar thermal generators and 95 wind turbines. The Alliance says that its proposal would create 1800 jobs and save five million tonnes of greenhouse gas emissions. The scheme has strong support in the local community, including council and business interests.

Ian Lowe is Emeritus Professor of science, technology and society at Griffith University.