Trees are worth billions to Australia’s economy — but how we value them is changing
How much is a tree worth?
In economic terms, your answer depends on how you value them.
Forestry exports contribute $3 billion to Australia’s economy; its manufacturing, sales and service income make up around $24 billion per year.
Increasingly, agroforestry and carbon abatement initiatives also provide an economic benefit.
So while money might not grow on trees, they are becoming more profitable.
The money tree
Forestry makes up less than 1 per cent of Australia’s economy, which is not an insubstantial figure at a regional level.
And forest scientist Rowan Reid says the branches of the tree economy spread wider than you may think.
“It’s a matter of what the trees give you over their lifespan, which is biodiversity, erosion control… and shelter for livestock,” says Mr Reid, who owns a tree farm in Victoria’s Otway Ranges.
“It gives you those values as it’s growing.
“At the end, you cut a tree down, you’ve got the value of the timber. That’s the cherry on top.”
Andrew Jacobs, from plantation-based forestry company Forico, says it’s not possible to put a dollar value on a single tree.
“It depends how old the tree is, depends a bit on where it is,” he says.
Forico operates 185,000 hectares of land in Tasmania; more than half of that is plantation forest.
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Mr Jacobs says an individual tree can cost anywhere between $1.50 to $2 to plant, and much more in maintenance.
In return, softwood trees “range from $70 to $175 per green metric tonne at the mill door,” he says, while hardwoods range from $100 to $140.
Are we valuing trees appropriately?
Peter Kanowski, a professor of forestry at the Australian National University, says we need to change the way we value trees to assess their full benefit.
Like Mr Reid, he says a tree’s profitability is about more than the wood sales it generates; they deliver “a much wider range of ecosystem services”.
This includes “carbon sequestration [and] water catchment values, depending on the tree’s biodiversity”.
“Our mechanisms for valuing those other than carbon are still pretty rudimentary,” he says.
For Mr Reid, it’s clear that managing a treed property is more profitable than a cleared property.
A land valuer recently placed his farm, Bambra, at around 30 per cent more financially lucrative because of its tree cover.
“You have a farmer who wants to buy [your property] because it’s well sheltered, you’ve got an environmentalist who wants to buy it because it’s actually providing biodiversity values, you’ve got someone who buys it because they anticipate that one day those trees will produce a high-value timber,” he explains.
“And then you’ve got someone who just says, ‘This is just a beautiful property, I want to buy it’.”
Changing nature of trees
Mr Reid is now a vocal proponent of agroforestry, which is increasingly gaining traction in Australia.
“Our family has been involved in farming for a couple of hundred years,” he says.
“If you look at it honestly, we’ve been involved in the degradation of our Australian landscape and the agricultural landscape.
“I saw the opportunity where forestry could be a regenerative, rehabilitating process for our Australian landscape.”
When his family’s attention turned to the next generation of farmers, Mr Reid — then 25 and a recent university graduate — saw an opportunity to take it in a new direction.
“My mum asked me a very simple question: ‘is there something you want to do with farmland?'” he says.
“I said ‘I’ve got this idea about attracting farmers and engaging them in tree-growing, but no one else is doing it the way that I visualised, so if I had some land, I could demonstrate that possibility’.”
Now, he has over 60 different timber species on Bambra farm, and is the chairman of the Australian Agroforestry Foundation.
A billion new trees by 2030?
Mr Jacobs says now is “a really good time to be in the tree business”.
“Demand is very high, around the world… if you’re in a plantation space with good certification and you’re producing a good product, then now is a really good time to be in forestry — which is a great contrast to say 10 years ago.”
Despite this high demand, Australia currently stands as a net importer of forest products.
“Most of what we import in terms of value is pulp and paper; we export wood chips and we re-import pulp and paper products,” Professor Kanowski says.
Mr Jacobs points out that the rate of new plantations has, in fact, decreased in the past decade.
“It’s been in decline or in a steady state, but now is actually declining since around 2008,” he says.
“And that’s a problem for us… we’re obviously selling a lot overseas but it’s not enough to supply our domestic market.”
That hasn’t escaped the Federal Government’s attention — earlier this year, it announced a target of a billion new trees by 2030.
One goal, the report states, is to “meet our future needs for wood and fibre”.
But it also acknowledges that, if the targets are met, we could see an additional 18 megatonnes of additional carbon sequestration in the next decade.
‘Untapped potential’: the role of carbon abatement
Carbon abatement — in this context, the role that trees can help play in sequestering carbon — is another financial incentive for planting more trees.
What is carbon farming and the Emissions Reduction Fund?
Skye Glenday is the head of strategy and risk at Climate Friendly, a business helping land managers assess their eligibility for carbon projects.
“If done the right way, the [billion trees goal could] deliver significant carbon abatement across the land,” she says.
Ms Glenday says carbon abatement offers a “significant revenue stream” for farmers she works with.
These schemes primarily operate through the Government’s Emissions Reduction Fund.
Ms Glenday works primarily with “mum and dad farmers”, based in north-west New South Wales and south-west Queensland.
“And they’re making decisions about how they can keep their land in agricultural productivity but also allow forest to regenerate on their properties,” she says.
These projects have the potential to bring in tens of thousands of dollars for farmers.
Even the smallest projects, Ms Glenday says, typically earn at least $100,000 each year.
“In the native regeneration areas, we’re finding that carbon is becoming a primary source of income for some landholders,” Ms Glenday says.
“In the plantation sector, it’s more about facilitating the expansion of the plantation sector and helping to address that growth capital need.”
More broadly, Ms Glenday sees the “untapped potential” of carbon abatement.
“We are a company of 25 people; we’ve got 100 projects already established… that delivers 40 million tons of carbon abatement,” she says.
“If a small company can delivery that, then I think collectively across Australia, we can meet our emissions reduction targets — and we’ve got a lot of potential to have a profitable land sector in the process.”