The Economics of Logging High Conservation Value Native Forests

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1. Introduction

This paper analyses some economic aspects of the issue of logging versus preservation of high-conservation value native forests in Australia. The question of what constitutes a high-conservation value forest is a difficult one. A simple definition would be those forests determined by scientific assessment to be likely to contribute significantly to long-term maintenance of the biota and the ecosystem processes on which they rely. This implies that we retain options for evolution.

This definition covers perhaps 60-80 per cent of forests currently available for logging, including privately owned land. The 1300 coupes identified as having high-conservation value that were the source of such heated controversy over the summer of 1994-95 covered around 40 per cent of all coupes scheduled for logging in 1995 (Senator Faulkner, Media Release 20 December 1994). Some of these forests have been selectively logged at some time in the last 200 years, but they are still of high conservation value.

I will argue on economic grounds that logging should end in these forests. The reason is that the evidence strongly suggests that use of these forests for logging is causing losses in other values greater than the value of logging. In addition, the dramatic shift in the timber industry to plantation timber means that the costs of ending native forests logging are much smaller than previously thought.

I should point out, however, that I do not believe that the question of logging in high-conservation native forests is principally an economic issue. It is an ethical issue first and an economic issue second. For the great majority of the Australian public opposed to woodchipping, the issue is not one of financial compensation or of willingness to pay, but of the moral sense that too much of Australia's forests have been cut and that they mostly should be preserved for all time. Clearly, -however, the economic aspects are very important to the debate.

2. The multiplicity of values of native forests

Most people do not appear to accept that the logging of native forests is desirable simply because it supports an industry and provides jobs. We must ask at what cost the industry and the jobs are supported. It is now recognised that native forests have a multiplicity of values, and that logging in some instances compromises other values of native forests.

The principal values of native forests are:

* timber values;

* environmental values;

* water values for downstream users;

* recreational values;

* non-wood forest products; and

* cultural, scientific and educational values.

Each form of forest management will affect these values differently. There are trade-offs between them; here we focus on the trade-offs between the two most important values--timber values and environmental values. Two of the principal environmental values are sometimes termed ecological values and wilderness values.

In the case of ecological values we mean the ability of forests to contribute to and sustain biodiversity. Biodiversity includes diversity of gene pools, of species and of landscapes or ecosystems. Representatives of the hardwood timber industry maintain that there is no trade-off between timber values and ecological values, that logging of native forests is consistent with ecological sustainability. It is often pointed out that there is no evidence that species have been made extinct as a result of logging. This argument is often challenged by ecologists and environmentalists on two grounds. (1)

Firstly, we cannot say unequivocally that there has been no loss of species as a result of logging. It is very likely that the enormous variety of invertebrates has suffered a decline in diversity as a result of logging activities. Secondly, it is certain that genetic diversity within species has declined as local populations have been lost. …