Kelvin Thomson (Wills, Australian Labor Party) Share this | Hansard source

I am pleased to have the opportunity to speak on the Forestry Marketing and Research and Development Services Bill 2007 and the Forestry Marketing and Research and Development Services (Transitional and Consequential Provisions) Bill 2007. The key elements of these bills are as follows. First, the main bill will establish a new forestry research and development and marketing company to replace the former Forest and Wood Products Research and Development Corporation. Second, it will allow the Commonwealth to provide matching funds for research and development projects undertaken by the new company.

Third, it will allow the new company to collect levies to fund its activities. This amount will be limited to the lesser of either 0.5 per cent of the gross value of production of the Australian forestry industry for the financial year, or 50 per cent of the amount spent by the new company on research and development activities that qualify under the funding contract in that financial year. There are also carryover provisions for research and development that is not 50 per cent matched. This will maintain research and development funding at the levels of the previous Forest and Wood Products Research and Development Corporation.

Fourth, the bill gives the minister broad powers to revoke the status of the new company if it is deemed to have contravened the act or the funding contract or a number of other specified instances which would call into question the legitimacy of the company’s activities. Fifth, it gives the minister the authority to direct activities of the new company in exceptional and urgent circumstances. And, sixth, it allows the minister to delegate any or all of his or her powers and functions under the bill to either the secretary of the department or an appropriate SES employee.

The transitional and consequential provisions include: transferring the assets and liabilities of the Forest and Wood Products and Research and Development Corporation to the new company, assets being estimated at $6.4 million; transferring staff from the Forest and Wood Products Research and Development Corporation to the new company; maintaining the terms and conditions of employment of staff in the new company; and retaining the Commonwealth as the liable party under the Safety, Rehabilitation and Compensation Act until staff commence with the new company. This also affects some existing entitlements for transferring Forest and Wood Products Research and Development Corporation employees. It is worth noting that the new company is not an approved authority for the purposes of the Superannuation Act 1976, the Superannuation Act 1990 or the Superannuation Act 2005. The transitional provisions allow the carryover of long service leave. They require final annual reports from the Forest and Wood Products Research and Development Corporation, and they allow unmatched research and development money to be carried over to the new company.

The current Forest and Wood Products Research and Development Corporation provides what has been described as a ‘national, integrated research and development focus for the Australian forest and wood products industry’. It is committed to research and development that promotes internationally competitive and environmentally sustainable practices.

The main bill establishes a company limited by guarantee under the Corporations Act which will assume the research and development functions currently being provided by the Forest and Wood Products Research and Development Corporation and incorporate new functions of marketing and promotion. The old Forest and Wood Products Research and Development Corporation could not undertake marketing and promotion activities, and the forestry industry has indicated its support for a new company to undertake this responsibility.

Some concerns have been raised about the bill. As the bill establishes a new entity undertaking new responsibilities, it is appropriate that it should be reviewed to ensure that it is properly established and that transitional arrangements are appropriate. It is appropriate to compare the outcomes of this process to the Uhrig template to determine if the administration of the new corporation is satisfactory. A review is also appropriate to consider the terms of the statutory funding agreement between the new corporation and the Commonwealth. A referral through a proper committee process will allow for the appropriate review and consultation to be undertaken.

The bill gives me an opportunity to say something about current and future directions of forestry research. Recently, I had the opportunity to discuss these forestry issues, particularly in relation to global warming, with some key people from the Food and Agriculture Organisation—Dr Wulf Killmann and Mr Jim Carle. We discussed global warming and carbon sinks. It should be noted that half the dry weight of biomass is carbon. Forests, like other ecosystems, are affected by climate change, be it a sea level rise that threatens coastal forests or changes in temperature and rainfall patterns. Some impacts will be negative; some will be positive. But forests themselves influence the climate and the climate change process. They absorb carbon in wood, leaves and soil and release it into the atmosphere when burned—for example, during forest fires or the clearing of forest land.

The United Nations Framework Convention on Climate Change obliges all member countries, of which Australia is one, to assess and report national greenhouse gas emissions, including emissions and removals of carbon reflected as stock changes in forests. The Intergovernmental Panel on Climate Change has created guidelines, methods and default values for all parameters needed to assess carbon stocks and their changes in forests. Quantifying the substantial roles of forests as carbon stores, as sources of carbon emissions and as carbon sinks has become one of the keys to understanding and modifying the global carbon cycle.

Unfortunately, the Food and Agriculture Organisation has found that many of the 229 countries and territories which are part of the Intergovernmental Panel on Climate Change have had difficulty in providing complete information concerning all pools of carbon—that is, above- and below-ground biomass, deadwood, litter and soil carbon to a depth of 30 centimetres. Many countries do not possess country specific information on the parameters necessary for calculating all carbon pools. As a consequence of missing data, it is not yet possible to aggregate country data to obtain complete regional or global totals for carbon in any pool. But it is worth pointing out that these totals and their changes over the years are very important for the global warming debate.

The Food and Agriculture Organisation has estimated that global forest vegetation stores some 283 gigatonnes in deadwood and estimates that soil down to 30 centimetres and litter contain 317 gigatonnes of carbon. It therefore estimated, as at 2005, the total carbon content of forest ecosystems at some 638 gigatonnes, more than the amount of carbon in the entire atmosphere. That is obviously very significant. Roughly half of total carbon is found in forest biomass and deadwood combined, and half in soils and litter combined.

In terms of trends, the Food and Agriculture Organisation has concluded that from 1990 to 2005 carbon in biomass decreased in Africa, Asia and South America, remained approximately constant in Oceania, and increased in Europe and North and Central America. Not all subregions followed this trend. More research in this area is essential, but the potential of forestry to play a role in tackling global warming by absorbing carbon from the atmosphere is clear.

How effectively is this potential being realised? The Kyoto Protocol to the United Nations Framework Convention on Climate Change expressly allows countries to meet their targets through the use of carbon sinks. The protocol allows parties to fulfil parts of their obligations through purchasing certified emissions reductions from carbon offset projects under the clean development mechanism involving forests. Conferences of the parties to the climate change convention have held meetings to address specific issues concerning the so-called land use, land use change and forestry activities. The parties to the convention have, perhaps unfortunately, reached different conclusions regarding the proper role of forests and appropriate national legislation to foster that role. As a result, national legislative activity on the issue of forests and climate change has been limited. One exception is Costa Rica, which has created a certified tradeable offset to attract developed nations looking to sponsor mitigation projects. The first project funded under this mechanism has involved forests. Indeed, New South Wales has changed its property laws to recognise a separate legal interest in the carbon sequestration potential of forest land.

A number of issues need to be resolved in relation to legislation to foster carbon sequestration in forests. For example: who can claim credit and receive payment for carbon sequestration and can that ownership be transferred? Who is responsible for carbon debits from deforestation, forest harvesting or natural calamities? How will the amount and duration of carbon credits be determined, recorded and verified? How can the government promote orderly sales or other transfers of ownership? How will national law allocate the risk of failure of carbon sequestration projects? Will the law assess liability for damaging a forest’s carbon sequestration potential?

Countries need to be thinking about how to encourage and integrate the use of forests as carbon sinks. Sequestering carbon in living forest biomass, soil and wood products, as well as substituting wood energy from sustainably managed forests for fossil fuels, are important mitigation measures.

Industry now adds about 6.3 gigatonnes of carbon dioxide to the atmosphere each year and the destruction of forests contributes at least another gigatonne. The current concentration of carbon dioxide in the atmosphere, some 370 parts per million, is about 35 per cent higher than it was in pre-industrial times, when it was 280 parts per million. It is therefore an appealing proposition to turn harmful emissions of carbon dioxide via photosynthesis into new forests, thereby replacing some of the 16 million hectares of natural forests that the planet loses annually.

There are various things that industry can do to increase its contribution to climate change mitigation through forestry. Dr Wulf Killmann says that 80 per cent of the energy performance of a pulp and paper mill is determined on the day machinery is purchased; that the forest products sector is probably one of the lowest investors in research of any of the resource based sectors; that there is a serious lack of funds for research and development; that the dryer section of the paper machine is the main user of energy followed by the concentration of the black liquor and that breakthrough technologies are needed that completely change the way mills dry paper and concentrate black liquor; and that, in the Nordic countries, research and development in a biorefinery is expected to reach hundreds of millions of dollars in the next few years.

The global forest products industry can play a significant role in combating climate change. Dr Wulf Killmann believes it has exceptional ability to become a net supplier of a range of energy products and it could, in combination with carbon capture and storage, become an important actor in removing carbon dioxide from the atmosphere. This will require optimising the use of raw material, increasing efficiency, producing bioenergy and expanding into biorefinery products. It also requires that forests be managed responsibly.

Jim Carle says that planted forests account for about seven per cent of global forest area—or about two per cent of global land area or slightly fewer than 300 million hectares. They provide more than half the industrial wood produced in the world and their extent and productivity are increasing. Compared with naturally regenerating forests, planted forests represent a higher investment per area unit and normally produce higher values through their products and services. They are also sometimes controversial, and achieving a balance among social, cultural, environmental and economic benefits is a challenge.

Planted forests can play a significant role in regulating water flows and improving water quality. They can be an important mechanism in rehabilitating catchments. As with naturally regenerating forests, they can regulate floods, reduce debris flows and stabilise land, thereby reducing soil erosion that would otherwise lead to excessive sedimentation in rivers and lakes. They can control soil and water salinity and improve soil stability to prevent landslides. It should not be assumed, however, that the impacts of planted forests are invariably positive. Inappropriate planting, particularly if using species with high water requirements, for example, can deplete water resources such as groundwater.

Then there is the issue of fire. While the release of heat-trapping emissions from fire is a natural phenomenon, the net release of carbon by wildfires, as a consequence of fire induced site degradation and lowered carbon sequestration potential, is contributing to global warming. Human population growth is associated with increasing rates of conversion of natural vegetation to agricultural and pastoral systems and with the development of residential areas, infrastructure and traffic. Land-use change is occurring in traditionally uninhabited or uncultivated areas, such as mountain slopes and floodplains. This is frequently a result of poverty, deforestation or vegetation conversion for production of cash crops for the global market.

In many regions of the world, the process is associated with the use of fire for land clearing and the increasing occurrence of uncontrolled fires. Many regions of the world have experienced a trend over the last decade towards excessive fire application in land-use systems and land-use change, and a trend towards more severe fires. The effects of fires include smoke and water pollution and impacts on human health and safety, loss of biodiversity, and site degradation with knock-on effects such as desertification, soil erosion or flooding. Fires burning under extreme conditions in some vegetation types, including organic terrain, can deplete terrestrial carbon and disturb the global carbon cycle.

The Food and Agriculture Organisation has been coordinating a multistakeholder process to prepare a global strategy to enhance international cooperation in fire management. This is in line with recommendations from the third International Wildland Fire Summit, which was held in Sydney in October 2003. The Food and Agriculture Organisation has developed a set of voluntary guidelines for fire management which cover the positive and negative social, cultural and economic impacts of natural and planned fires in forests, woodlands, rangelands, grasslands, agricultural and rural/urban landscapes. The fire management guidelines cover early warning, prevention, preparedness, safe and effective initial attack on incidences of fire and landscape restoration following it.

Naturally around the world there are many different situations, ranging from areas with few fires and little impact to areas in which fire is a key component of ecosystem health. Even in developed countries, people and communities move into fire-prone areas, causing problems for protection from fire. Of particular significance, and certainly this is true of Australia, are the areas in which fire plays an important role in the environment, either playing a role naturally in sustaining the ecosystem or providing for livelihoods through agricultural or other uses.

Jim Carle says that the need to protect lives, resources and property from the adverse effects of fire must be balanced against the need for the appropriate use and equilibrium of fire in the environment. He also says that the notion of the ‘good fire’ should continue to be advocated. Fire can be good for habitats, for resources, for reducing threats and for maintaining cultural values.

The projections for global warming indicate increasing impact in relation to fire regimes. The prospect of a global mean temperature rise from 1.6 to 5.4 degrees Celsius by 2100 represents a much more rapid change than any experienced over the past 10,000 years. Just as importantly, in turn more frequent droughts will give rise to more high-severity wildfires, leading to loss of vegetation cover, desertification and reduced terrestrial carbon sequestration. Both land use fires and wildfires in all ecosystems are affecting carbon pools and global carbon cycles. In turn, global warming affects the duration and severity of dry seasons, therefore impacting on the incidence and severity of fires. In light of global warming, fire management practices need to take into account observed and anticipated changes in fuel and vegetation type, burning conditions and additional fire risk.

Policies are needed to maximise the storage of carbon in ecosystems without increasing the likelihood of unwanted fire risk. We need to minimise the global warming emissions that occur as a result of large-scale, unwanted fire by restoring and maintaining ecologically appropriate fire regimes.

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