The Economics of Logging High Conservation Value Native Forests

This paper analyses various aspects of the economics of logging high conservation value native forests. After outlining the multiple uses of these forests, evidence is reviewed that suggests that subsidisation of logging is extensive. Next the paper reviews work that indicates that when account is taken of the environmental values lost due to logging (including the value of water with alternative uses) there are net social costs from logging high conservation native forests. Finally, changes to the structure of the wood products industry are analysed and it is argued that the growth of plantation timber, although rapid, has been constrained by subsidisation of native forests logging. Despite this, the data show that plantation-sourced wood will capture most of the market for sawn timber and pulp within a decade. There is thus the opportunity for Australia to have its timber needs met without the environmental costs associated with logging of native forests.