Pricing our heritage

BARNABY DRAKE
Nowhere have I been able to find the real value of trees and forests in terms of what they are worth in dollars if they are left standing.

This factor does not seem to have been evaluated, although there are many prognostications that they could be worth more as trees than as woodchips. As carbon trading offsets and carbon credits they could be far more valuable than the measly price they are being sold for in Tasmania. While they are standing, their value remains, but once ‘harvested’, that value has gone for ever and they then add into the global warming by producing carbon dioxide, and they also no longer act as a filter for these gases.

This is an attempt to remedy this situation with some real values.

The Bath Allusion.

Imagine the world as a bath and the creation of Carbon dioxide as the water that is filling it. Disaster happens when the bath is full and starts to overflow. We are approaching that situation rapidly, hence the Kyoto Agreement and other factors that try to slow this process down, but whatever we do, we are not actually taking the water out of the bath, all we are doing is turning the tap down a little bit to prevent it from filling up as quickly. It is just a delaying tactic, because eventually the bath will fill and then overflow, and we will have that disaster. How long this will take we don’t know for sure, but it is a very real situation.

The only saving grace is to find a method of removing the water from the bath and thus prevent it from overflowing. We need to take out the plug and let some of the water out.

The only plug we have any control over are the forests and trees of the planet that actually absorb and store carbon dioxide and remove it from the atmosphere. Trees are the ONLY known method of doing this that we have any say over.
All the talk about clean coal and carbon sequestration are merely methods of slowing down the production of CO2, not of removing it from the atmosphere.
Yet we know this, and still we are prepared to sacrifice the only method we have of removing this potential disaster, but we will not take the requisite action. Instead, by only considering short-term profits we actually use our forests for exactly the opposite effect and INCREASE the rate by which we are filling this bath. We cut them down and turn the store of CO2 that has been there for centuries back into these harmful gasses.

Since time began, trees have been slowly and steadily sequestering carbon dioxide in the form of fossil fuels for millions of years. In the early days of the planet, the atmosphere on Earth was unbreathable. We are only alive today because of the continuous action of the trees and forests of the past and present. We are rapidly returning this trapped carbon and other noxious gasses back into the atmosphere, and in so doing, are contributing to our own demise.

There comes a tipping point where the bath actually overflows, and after that, there is no control. Despite every effort on the part of governments and industry, we will never have a situation where we achieve zero emissions. The best we can hope for, and it is looking like a very long shot at the moment, and using technology that we haven’t even invented as yet, is that we will be able to absorb and reduce the carbon dioxide from the atmosphere at the same rate that we generate it, but currently, without trees, this becomes an impossibility. We are cutting them down faster than we can grow them, and by a massive factor.

‘Clean Coal’ – a few problems.

It is called ‘clean coal’, but it is not clean in any shape or form. This is just spin. What they are referring to is that we are attempting to find a way of storing the carbon dioxide underground that we generated from burning it and not release it into the atmosphere. We are still nowhere near this objective, and there are doubts whether it is even possible. The coal does not change in any way and suddenly become clean. It will continue to generate the same amount of carbon dioxide as ‘Dirty Coal’.

Coal is a fossilized form of wood, laid down by our ancient forests. Most of the extraneous matter that it was created from has disappeared and what we are left with is a solid form of relatively pure carbon. However, when we burn it, we recombine it with oxygen in the form of carbon dioxide. It is unfortunate that one tonne of carbon, when burnt, forms three and a quarter tonnes of carbon dioxide, so it also has a larger volume than the coal it was generated from, which means that to store it, you need a space at least three and a quarter times the size of the hole that it came out of. (The same applies to oil.) If you bury a million tonnes of carbon, you are also burying two and a quarter million tonnes of oxygen, and the atmosphere is depleted by that much.

Problem one. Carbon dioxide has no natural liquid state. It goes from gas to solid, known as ‘dry ice’, and converts straight back into gas as soon as it absorbs enough heat.

Liquid carbon dioxide only exists in an artificial state after the gas is compressed. As soon as the pressure is released, it once more reverts to gas. The volume of the gas is 362 times that of the liquid per degree centigrade. Ten degrees above the liquefied temperature and the volume is 3 620 times as great.
To store this liquid underground, it would have to be maintained at a low temperature and high pressure, and the deeper you go, the hotter the ground becomes. To maintain it as a liquid the storage pressures would have to be enormous to counteract the temperature rise, or else we would have to refrigerate it – perpetually! I don’t know whether I am missing something, but to maintain the carbon dioxide in its liquid form from one power station, I reckon it would probably take two power station’s worth of electricity to maintain the required pressure and temperature (?)

A bit self-defeating.

Even if this were possible, we would still have to find a storage area where it would be safe for the next two thousand years. If we just lock it away and seal up the entrance and hope that it will stay there, we have to pretty sure nothing is going to happen to the area in the next two thousand years that would allow any of it to escape. A small fault, a crack in the earth’s crust, an earthquake? Once it starts to happen and it finds a way out, it will ALL find a way out, and there won’t be any way of stopping it. You won’t be able to put your finger in the dyke. 2000 years is a long time to ask for a warranty!

We are pinning a lot of hopes on this, and I haven’t heard of any other major solution to the problem. There are no plans to actually stop using fossil fuels and they will continue to pollute our atmosphere at an ever increasing rate – until they actually run out, or the world itself decides to take its own actions to stop us, and that could be permanent as far as humanity is concerned.

Value of Forests

This then prompts the question, what are our forests worth? There are several ways of answering that question, and the one that has the least value is to cut them down and turn them into woodchips. That compounds the problem, for the entire mass ends up as carbon dioxide after about three years. In 2000/01, Forestry Tasmania was actually selling old growth timber to Gunns at the rate of $2.21 per tonne. Since then figures have not been available, the government having deemed it ‘not in the public interest’ and excused it from the Freedom Of Information Act.

Year – Hectares logged – Pulpwood produced – Dividend to State

1999-2000 11,200 2.24 million tonnes $8.687 million

2000-01 15,000 2.61 million tonnes $5.759 million

(Source: Forestry Tasmania Annual Reports 1999-2000, 2000-2001)

This equates to $3.88 per tonne for 1999-2000 and $2.21 per tonne in 2000 – 01. Less than the price of a cup of coffee!

For every tonne of wood extracted, 40% remains on the forest floor, and this is usually destroyed by fire shortly afterwards, further adding to the greenhouse gasses.

It has been suggested that under the new Pulp Mill agreement, and Forestry has not denied this, that Gunns being the sole customer, have had the price fixed to the international price of pulp. If this falls below US$400 per tonne, as it did in 2002 and 2003, then Gunns becomes non-viable and will need massive subsidies to survive and the price of stumpage could go negative. This means we will actually be paying Gunns to take our timber off us!! (Source: Naomi Edwards: RPDC Submission)

http://www.twff.org.au/nerpdc2006.pdf

A simple calculation based on the forestry figures gives 20 690 hectares of forest to be clearfelled annually to maintain this supply. Over the 20 years of the agreement, this equates to 413 800 hectares, and this is for the pulp mill alone. It is unlikely that the current rate of clearfelling that is not designed for this mill will decrease. Figures show that even this is on the increase. At the 2002 rate, this would equate to 15 000 ha x 20 = 300 000 hectares giving a conservative total of 713 800 hectares of old growth forest lost.

If the returns are negative for any period of time, then this adds nothing into the economy of Tasmania but tops up the bath water considerably. We again subsidise the investors of Gunns, and while we make the loss and support them, they cream off the profits.

Now let’s take another look at what the forests are really worth.

Trees are approximately comprised of 44% carbon and if this carbon can be guaranteed not to be cut down over a hundred year period it becomes a carbon credit, which is a tradable commodity. One tonne of carbon credit from their forests is currently being sold for $23 in NSW. (http://www.carbonplanet.com/home )

Compare this to what Forestry Tasmania is getting.

Average price over 1999 – 2001 period = $2.98 / Tonne.

Averages from the above Forestry report :-

26 500 hectares yielding 4 850 000 tonnes of timber for a total price of $14.446 million over two years = $7.223m / year

Assume the same yield from NSW Forests, but adding in 40% residue that is not destroyed. (4 850 000 + 40% = 6 790 000 t.)
Carbon = 44% of mass for trading. (44% x 6.790m = 2.9876m )

2.9876 tonnes x $23.00 trading credit = $68.7148million = $34.3574million per annum from the same area as Tasmania logs.

This is 4.76 times as much as Tasmania gets, and all that money remains with the State.

Now lets look at this over the twenty year period.

TAS: 713 800 ha x 185.1145 tonnes of timber per hectare = 132.134730 million tonnes.

TAS: 132.134730m x $2.98 / tonne = $393.76149 million.
NSW : $393.76149m x 4.73 = $1 862.4918m

The NSW return over twenty years equals the price of the pulp mill, and they don’t have to borrow the money or pay interest. They retain their tourist trade. They keep their honey trade. They do not pollute the air or endanger their fishing industry. There is no health threat nor extra transport nor any additional infrastructure costs and the entire profits remain in the State.
They can trade with these credits on the stock exchange and they’ve still got all their trees!

They have put nothing into the atmosphere by way of green house gas and they continue to lower the bath water by extracting carbon dioxide from the atmosphere.

We get 292 jobs, many of which will be technical and sourced out-of-State, and as the price of pulp drops due to world over-supply, we will possibly end up not making any money at all and actually paying Gunns to take our forests and timber off our hands.

Meanwhile NSW makes $1.86 billion profit from the same area that we have destroyed.

Here they call it ‘Building futures in Tasmania’!

Barnaby Drake.