NSW Liberals’ Plan: Carbon Credits to Exit Native Forestry

The senior Coalition partner was hoping to take a policy to cease harvesting in native State Forests to the March 2023 election.

Thu 20 Jul 23


Senior NSW Liberals sought support from the Federal government to generate carbon credits by ceasing harvesting in state forests – with the proposal rejected by the Federal Government.

The Guardian exclusively reports that documents obtained under freedom of information laws reveal the then Environment Minister, James Griffin, and Energy Minister, Matt Kean, wrote to Tanya Plibersek and Chris Bowen seeking the creation of new credits under the Emissions Reduction Fund.

An “improved native forestry methodology” would generate “significant carbon abatement” and create an important revenue stream, the document written in December 2022 said.

According to the proposal, the funds would be invested to manage existing national parks, create new ones and develop plantations.

These would deliver “major ecological benefits for species such as koalas, greater gliders and other threatened species as well as significant economic benefits for regional Australia”, the letter said.

Then Energy Minister Matt Kean took the proposal to Federal Energy Minister Chris Bowen, pushing for change to the Emission Reduction Fund. (Photo Credit: The Daily Telegraph)
The former NSW Government planned to take a policy to the 2023 election

In May, the Guardian reported that the then-Perrottet government was developing a policy to end native forest harvesting and had planned to take it to the March 2023 election.

The Nationals blocked the plan before it could go to cabinet.

According to the Guardian, the incoming Chris Minns’ Labor government was surprised by the plans as their departments had yet to brief incoming ministers about the strategy.

The Liberals had aimed to develop multiple prongs to phase out the loss-making timber operations without costing the budget.

That work included commissioning Frontier Economics to examine how the resulting carbon credits could cover the cost of reducing harvesting in southern NSW by 20%. 

The report, obtained under freedom of information laws, states that the policy could generate 8.68 million tonnes of carbon reduction over 30 years. 

The plan was to use abatement to compensate affected communities and workers. 

The letter stated there would also be “significant economic benefits” for the NSW south coast, “including an estimated 178 additional jobs through tourism and other ventures.”

NSW Premier Chris Minns with Courtney Houssos, minister responsible for forestry… the new Labor ministry has become the first in NSW history to have equal numbers of women
NSW Premier Chris Minns with Courtney Houssos, the minister responsible for forestry.
Carbon Markets are allegedly more profitable without hardwoods.

In May, Wood Central Contributor Gordon Wilson reported on “Branching Out” – a report prepared by the Liberal-party aligned “BluePrint Institute.”

In the report, carbon markets were identified to be more profitable without native hardwoods.

The BluePrint Insitute was commissioned to research the future of native forest harvesting in New South Wales, Victoia, with Tasmania next.

“The simplicity of this approach is astounding,” Wilson said, with the report “is silent on the economic and environmental impacts of product substitution.”

The employment figures for the NSW native forest industry, Wilson alleges, were set at just under 600. 

Yet, when privately asked if the 2023 Ernst and Young Report had been seen, the economist for the group replied they had seen it … but the report was unbelievable,” Gordon said.

In February 2023, Wood Central exclusively revealed that the Ernst and Young report commissioned by the federal government established North East NSW Forestry Hub contributes $2.9 billion in revenue, adding $1.1 billion to the state’s gross domestic product and employing almost 9000 people.

Timber NSW CEO Maree McCaskill, a contributor to Wood Central, said: 

“We need to set out the facts. Hardwood timber is a sustainable, renewable and essential input into the construction, agriculture, mining and energy sectors.”

The Ernst + Young Report shows that northeast NSW supplies two-thirds of the state’s nation-building hardwood timber, which makes an important contribution to the state’s economy.”

Ernst + Young’s report, commissioned by the commonwealth-funded North East NSW and South East NSW Regional Forestry Hubs, tracks the hardwood timber industry’s direct and indirect economic impact. 

It shows the critical importance of the industry to the Northern NSW economy, contributing $1.8 billion in revenue, adding $700 million to NSW GDP and employing 5700 people in the region.

Ernst + Young Report shows that northeast NSW supplies two-thirds of the state’s nation-building hardwood timber, which contributes to the state’s economy … and jobs.
Push to change the methodology for Carbon Markets encouraged. 

Griffin and Kean’s approach to the federal government to alter the methodology to count avoided deforestation had been “encouraged” by the federal government, one person with knowledge of the plans said.

Earlier this week, Wood Central reported that the Federal Government is reviewing the Environmental Laws – with sources advising that the NSW Regional Forestry Agreements could be involved in the shake-up.

Despite that overture, several people told Guardian Australia that neither Plibersek nor Bowen replied to the letter.

A spokesperson for Plibersek deflected questions to Bowen’s office. 

A spokesperson for Bowen said since the December letter had been sent, the “government received and accepted the advice of the Independent Review of Australian Carbon Credit Units that method development should be proponent-led”.

“Proponents of methods to credit improvement management of native forests are welcome to engage in the consultation,” they said.

 A spokesperson for NSW’s new Environment Minister, Penny Sharpe, said the government would continue to work with federal counterparts on carbon farming methodologies as set out by the Chubb report.

“We believe there are significant opportunities to improve the current system,” he said.


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