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'Logging Off!' analysis shows cost of logging

Excerpts from a summary of 'Logging off! A cost-benefit analysis of land use options for the native forests of the Central Highlands' written by Rod Falconer, Rubicon Snobs Creek Reserve

A recent publication of an in-depth report by the Blue Print Institute titled 'Logging off! A cost-benefit analysis of land use options for the native forests of the Central Highlands, Victoria’ shows logging costs much more than it makes, & highlights the economic and employment opportunities in protecting native forests instead of logging them, especially when considering VicForests’ current losses.

The reports calls for the Victorian Government to immediately:

  1. Commit to ceasing the logging of native wet forest in 2022–23 (as opposed to 2030),
  2. Legislate the ending of native forest logging (to give weight to verbal commitments),
  3. Amend or repeal The Forests (Wood Pulp Agreement) Act 1996,
  4. Expand land valuation methodologies to include water, carbon storage, and tourism,
  5. Strengthen formal policy mechanisms designed to conserve ancient wet forests.

The native forest industry has been on a course of structural decline since the early 1990’s due to a combination of declining demand, diminishing timber supply and increasing global competition. Despite massive Government grants to provide life support to the industry, log production from native forests has declined massively, falling by 44% between 2005 and 2019.

Compounding this loss has been the decline in the global demand for woodchips since 2008, which fell 33% during the period 2008-2012.

In Victoria, 19 out of 20 jobs in the forestry sector are based on plantations, and in 2016 there were only 506 full-time equivalent jobs directly employed in the native forest industry. As the plantation sector has become more dominant, the volume of exported unprocessed hardwood pulp log has also increased significantly.

The reports emphasises that if native forests were preserved for tourism, water supply, and carbon sequestration, the one third of forestry employees already in roles focused on growing and managing forests could potentially retain sustainable employment opportunities in the sector.

The Victorian Parliamentary Budget Office has shown that the Victorian economy would be $192 million better off if the native forest logging industry was closed immediately.

In WA, the state government is planning to end native forest logging from 2024. In announcing their decision in 2021, the government argues that;

“The ever-increasing impacts of climate change, the importance of maintaining biodiversity and forest health, the need for carbon capture and storage, and declining timber yields mean that it is essential that we act now to protect Western Australia's forests”.

The difference between plantation and native forest logging

Across Australia, since the early 2000s, the value of native forest hardwood has declined compared to plantation alternatives. Currently, plantations produce over 85% of the logs harvested annually across the continent. Plantation softwood timber generates 60% less greenhouse gas emissions than hardwood native timber. Victoria has the highest level of plantation wood production and export volume in the country: currently, five out of six trees come from plantations.

The predominant species of tree (over 65%) that is logged here in Victoria is Mountain Ash, a now endangered ecosystem. VicForests have been allocated 60,000 hectares of Mountain Ash forest, despite the fact that they are second-tallest trees on earth, the tallest flowering plants that are some of earth’s most carbon dense, with up to 1,800 tonnes of above- ground biomass per hectare. These forests are crucial for biodiversity conservation and support key populations of endangered species like the Leadbeater’s Possum.

The importance of the mountain ash forest ecosystems doesn’t end here: They alone generate most of the water for the more than five million people in Melbourne, along with many other communities. As it stands today here in Victoria, the equivalent of over four Melbourne Cricket Ground’s worth of native forest is being logged in Victoria every day.

In the 2020/21 period VicForests made a net loss of $4.7 million that compounded on a $7.5 million dollar loss the previous year. VicForests’ financial future is a bleak one. As a result of a number of factors, notably diminishing supply and recent Supreme Court rulings, it will be forced to harvest marginal coupes that require progressively higher harvesting and haulage costs, having logged the most profitable and highest-yield coupes already.

Between now and 2030, VicForests’ continued survival will depend on generous state government grants courtesy of the Victorian taxpayer. Most alarmingly these grants, along with their spending allocations, distribution, and efficacy, are hidden from public view. They are not publicly disclosed or accounted for in annual statements.

Logging and fire severity

Logging of native forests makes forests drier, and therefore more prone to fire, putting the industry’s future at further risk. Studies following the 2019-2020 Black Saturday bushfires confirm that there was a 25% increase in fire severity in logged forests compared to forests that remained un-logged. There exists a direct relationship between the extent of logging activity and the severity of bushfires.

The Victorian government announcement (February 2020) of proposed changes to logging rules,will weaken protections for bushfire-prone communities and the environment.

The benefits of protecting native forests

The authors of the report rightly state that the forests of the Central Highlands, home to critically endangered species of global significance, have far more benefits protected than logged.

When a forest is logged, as well as producing carbon, the  economic benefit of its carbon sequestration capacity is lost also, as well as the  reduction of water yield and potential tourism revenue. The preservation of native forests also provides intangible benefits, such as improvements to people's health and wellbeing, habitats for endangered animals, and improved biodiversity and ecosystem resilience.

The mountain ash forests of the Central Highlands contain the highest density of carbon globally—storing approximately 1,867 tonnes of carbon per hectare: two to five times higher than that of previous estimates. 

Ending native forest logging prevents carbon being released to the atmosphere, allows the trees to grow and maintains a vital source of carbon storage and sequestration. Maintaining a forest to act as a carbon sink provides a great economic value to the State. The Blueprint study estimates that Victorian parks could capture and store 21,000 tonnes of CO2-e annually through revegetation programs and that continuing to log within native forests, would reduce carbon stocks more than wildfires do.

The immediate cessation of logging and utilising the region for carbon storage, the Report maintains, would herald a great opportunity for Victoria economically and environmentally.


According to Blueprints' analysis, the Central Highlands’ proximity to Melbourne's spiralling population means that the increase in tourism in the region could provide a value of $58.7 million with a total cost of $24.5 million over eight years. 

Preserving forests for the purposes of tourism and outdoor recreational activities has achieved great success internationally. Here in Victoria, although briefly causing a lull in visitors, COVID-19 lockdowns have increased the value Victorians place on their natural environment, and could result in greater visits to national parks compared to pre-pandemic levels.

Within Victoria (2018-2019), the most popular recreational activity by tourists included outdoor and nature-based activities. Overall in this period, 64 percent of  visitors to Victoria participated in nature-based activities. When tourists come, employment opportunities increase exponentially.


Read the Australian Financial Review coverage of the Blue Print Institute report here


Excerpts from Rod Falconer's summary on 'Logging off! A cost-benefit analysis of land use options for the native forests of the Central Highlands' written by Rod Falconer

Rod is a founder of the Rubicon Snobs Creek Reserve.

He was born and bred near Snobs Creek, close to the small township of Eildon on Taungurung Country. Rod is particularly concerned with devastating impacts of clear-fell logging on waterways, and to Snobs Creek fish hatchery which produces Brown & Rainbow Trout, Chinook Salmon, Murray Cod, Macquarie Perch & Trout Cod in record numbers. The hatchery provides fish to over 200 rivers, lakes and impoundments across Victoria which, in turn, supports a huge recreational fishing community.