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Pages tagged "Climate Energy"

Seeing the forest for the trees: Exploring alternate land use options for the native forests of Tasmania

Australia is home to some of the world’s most ancient forests. These native forests are some of the most biodiverse environments on the planet, and are a valuable tool in the fight against climate change through their ability to capture and store carbon and regulate the water cycle.

This paper offers policymakers a blueprint for assessing the true value of our native forests. Recognising the inherent preferencing of the quantitative (particularly when it comes to Expenditure Review Committee processes), we conduct a comprehensive cost-benefit analysis of conserving Tasmania’s native forests, in particular those which are currently subject to logging by the state-run firm Sustainable Timber Tasmania (STT). This paper builds upon Blueprint’s previously published studies on the economic potential of alternate land uses of native forests in Victoria’s Central Highlands, and New South Wales’ North Coast.  

Using a cost-benefit analysis based on cash flows, we evaluate the economic potential of native forest conservation by modelling the value of carbon sequestration against continued logging. Our forecast shows that if STT ceased their native logging operations in FY2025 instead of FY2049, the use of this land for carbon sequestration would provide a net-benefit valued at $72 million in present day dollars. We find that a move to alternate land uses will result in a positive net present value, even when factoring in the estimated cost of providing a transitional package to the broader forestry industry to facilitate its move toward a more sustainable plantation-based future.

Our cost-benefit analysis incorporates a range of assumptions that were deliberately designed to overstate the costs and minimise the benefits of halting STT’s native timber logging. Were we to remove these assumptions from our cost-benefit analysis, we find a net benefit of $936 million in ceasing logging immediately. By including these favourable assumptions, we, methodologically speaking, have given the logging industry the benefit of the doubt—demonstrating that even when every conceivable dollar is counted in favour of STT’s native timber operations, it nevertheless shows itself economically uncompetitive against alternate land uses. 

The native forests of Tasmania have significant capacity to generate major alternate revenue streams that can replace that which is generated from logging—on the proviso that a robust carbon methodology is put in place, to enable the generation of Australian Carbon Credit Units (ACCUs) from a cessation of timber harvesting. In particular, we find that managing Tasmania’s native forests in a manner consistent with conservation principles would abate an average of one million tonnes of carbon annually. This equates to a net present value of $345 million at current ACCU spot prices. 

Lastly, we must comment upon the unusual and declining transparency in STT’s annual reports. Other state-run forestry corporations that we have studied were noticeably less opaque, particularly with respect to pricing information. The lack of publicly available pricing information likely acts as an impediment to private investment by increasing uncertainty, thus deterring private plantation-based competitors from entering the market.    

In light of our findings, we encourage the Tasmanian Government and Opposition to work in concert with the Federal Government to enact the following recommendations:

  1. Immediately cease all government subsidies to STT.
  2. Legislate the end of STT’s native forest logging operations in Tasmania by FY2025.
  3. Implement a robust carbon methodology that would enable the generation of ACCUs through a cessation of native timber harvesting and a suite of conservation-based management practices.
  4. Expand timber plantations to meet timber demand.
  5. Incentivise private investment in timber plantations.
  6. Improve STT’s transparency to match that of other state-run forestry corporations, particularly as it relates to the price of timber.
  7. Create a ‘natural capital’ weighting that increases the value of native forests, thus ensuring that they have a higher Benefit Cost Ratio when Expenditure Review Committee decisions affecting them are made.
  8. Support the development of environmental markets to channel private capital toward nature-positive biodiversity outcomes in Tasmania

Branching Out: Exploring Alternate Land Use Options for the Native Forests of NSW

Australia is home to some of the world’s most ancient forests. The benefits of native forests are extensive—they are efficient carbon sinks, they are amongst the most biodiverse environments on the planet, and they provide vast quantities of water (and preserve the quality of the water table).

This paper offers policymakers a blueprint for assessing the true value of our native forests. Recognising the inherent preferencing of the quantitative (particularly when it comes to Expenditure Review Committee processes), we conduct a comprehensive cost-benefit analysis of conserving the native forests of the Upper and Lower North East Regional Forest Agreement areas of New South Wales, also known as the North Coast. This piece of work builds upon Blueprint’s previously published cost-benefit analysis of alternate land uses versus logging in Victoria’s Central Highlands. We assess the economic potential of native forest conservation by modelling the value of carbon sequestration and tourism against continued logging. Our findings demonstrate conclusively that there is no economic case for continued logging of native forests on the North Coast of New South Wales. As in the Central Highlands of Victoria, logging of native hardwood forest on the North Coast is a loss making enterprise, subsidised by Forestry Corporation of New South Wales’ (FCNSW) profitable softwood plantation division, along with the taxpayer via periodic equity injections from the state government. Based on its own merits, we find that FCNSW’s native hardwood division is not commercially viable.

Using cost-benefit analysis modelling we find that ending native forest logging in 2023–24 instead of 2039-40 (the date that the North East Regional Forestry Agreement is currently scheduled to expire), and instead utilising the land for carbon sequestration and tourism will deliver a net benefit valued at $45 million in present-day dollars. This includes the estimated cost of providing transitional packages to the industry as it shuts down, as well as the cost of breaking wood supply agreements that extend to 2028.

The native forests on the North Coast have significant capacity to immediately generate major alternate revenue streams that can replace revenue generated from logging. In particular, we find that managing the North Coast region in a manner consistent with conservation would abate an average of 0.45 million tonnes of carbon annually. This equates to a net present value of $174 million. Our analysis also indicates that increased tourism to the region could, over 17 years, provide a net present value of $120 million. In totality, from present to FY2040, using the forests of the North Coast for purposes other than logging will generate at least $294 million in revenue.

The next government-led five yearly review of the logging industry will commence in 2024, making now an ideal time for impactful analysis. We encourage the New South Wales Government and Opposition to enact the following recommendations

1. Immediately cease all government subsidies to FCNSW.

2. Create a ‘natural capital’ weighting that increases the Benefit Cost Ratio of native forests when Expenditure Review Committee decisions affecting them are made.

3. Legislate the end of native forest logging in New South Wales.

4. Expand land valuation methodologies to include carbon storage, tourism and water.

5. Expand hardwood timber plantations to meet hardwood demand.

6. Incentivise private investment in timber plantations.

7. Expand formal policy mechanisms aimed at conserving native forests.


Achieving Prosperity in a Net-Zero Future market-friendly climate and energy blueprint for the 47th Parliament

The economic case for action on climate is clear. Over the past decade, the precipitous decline in the cost of renewable energy has opened a window of opportunity.

The race to decarbonise is gathering pace—future growth and prosperity will be determined by our ability to capture green capital and low-carbon industry. Countries that deny or delay this change will be left behind. Australian investors and business leaders know this and are desperate for the Federal Government to meet them on the same page.

This paper offers a suite of ‘low-hanging fruit’ policies for the 47th Parliament to consider and for the government, opposition, and crossbench to embed in their respective policy platforms. These policy recommendations are the result of extensive consultation with experts in the relevant fields and capture valuable lessons learned—from within Australia and abroad— from what has and has not worked in the past. They are actionable and ambitious, they can be implemented immediately, are affordable (in many cases revenue positive), and will have a beneficial impact in delivering emissions reductions.


Logging off: A cost-benefit analysis of land use options for the native forests of the Central Highlands, Victoria

Australia is home to some of the world’s most ancient forests. The benefits of native species forests are extensive—they are efficient carbon sinks, they are amongst the most biodiverse environments on the planet, and they provide vast quantities of water (and preserve the quality of the water table). 

This paper offers policymakers a blueprint for assessing the true value of our native forests. Recognising the inherent preferencing of the quantitative (particularly when it comes to Expenditure Review Committee processes), we conduct a comprehensive cost-benefit analysis of conserving the wet forests in the Central Highlands of Victoria. The Central Highlands has been selected as the case study for this paper—but our general approach could be applied to any native forest area in Australia.

We model the value of carbon sequestration and tourism against continued logging. Our findings clearly demonstrate the economic benefit of an immediate halt to logging of native wet forest in 2022–23, as opposed to the status quo of a delayed exit by 2030. Specifically, we find that ending logging in 2022–23 will deliver a net benefit valued at $59 million in present-day dollars.

Yet these results have been slow to translate to policy action. Presently, the Victorian government has loosely committed to phasing out logging of native forests by 2030. However, this is not legislated—a significant (and intentional) oversight. In the meantime, the native logging industry is propped up by government to protect an ever-decreasing number of jobs and placate misguided pressure from vested interests. Economic protectionism is damaging and regressive at the best of times. This is amplified exponentially when it results in severe environmental degradation.

Our native wet forests are at high risk of collapse unless the right policy settings are put in place to protect them into the future. It is critical that policymakers take a more expansive view when assessing land value—that they move away from the ‘what’s in it, what’s on it, how do we sell it’ paradigm that has dominated land valuation methodologies to date.

In response to the findings from our modelling and research, Blueprint Institute calls on the Victorian Government to enact the following changes:

  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, and
  5. Strengthen formal policy mechanisms designed to conserve ancient wet forests.

Breaking new ground: Challenges and opportunities of a changing energy landscape in regional Australia (Latrobe Valley, Victoria)

A new Blueprint institute series takes a deep dive into the regional realities of Australia’s shift to a clean energy future—and what that will mean for communities on the ground. Alongside the already released South-West Queensland paper, they examine Central Queensland, the Latrobe Valley of Victoria, the Central Coast of NSW, and the Collie region of WA. Across these five regions—home to all our remaining coal-fired generators, and most of our coal mines—Blueprint’s analysis finds that while opportunities are abundant (in renewable energy and more broadly), and significant prospective projects are underway, uncertainty caused by a lack of definitive policy direction is hampering their development. 

In the Latrobe Valley of Victoria:

  • In the next eight years, renewable energy projects in the region could offer 3,160 positions in construction and installation, and 740 ongoing jobs in operations and maintenance.

This represents a significant opportunity, but also a stark reality check—government must do more to enable wider regional economic diversification in these communities.

Expecting renewables alone to compensate for the stable, high-paying jobs that coal has provided is unrealistic. But importantly, our analysis finds that all of the regions studied are full of untapped potential that the clean energy economy, broad diversification, private investment, and targeted government backing in vital areas can unlock. 

“Institutions set up to deal with Hazelwood’s sudden closure in 2017, such as the Latrobe Valley Authority, have shown us that locally led initiatives can spur economic diversification. As we look to the future, vast opportunities such as the Valley’s offshore wind resources, among others, can further support the region’s bright future,” said CEO David Cross.

A detailed outline of the opportunities available to the Latrobe Valley is available in the full paper.


Breaking new ground: Challenges and opportunities of a changing energy landscape in regional Australia (Central Queensland)

A new Blueprint institute series takes a deep dive into the regional realities of Australia’s shift to a clean energy future—and what that will mean for communities on the ground. Alongside the already released South-West Queensland paper, they examine Central Queensland, the Latrobe Valley of Victoria, the Central Coast of NSW, and the Collie region of WA. Across these five regions—home to all our remaining coal-fired generators, and most of our coal mines—Blueprint’s analysis finds that while opportunities are abundant (in renewable energy and more broadly), and significant prospective projects are underway, uncertainty caused by a lack of definitive policy direction is hampering their development. 

In Central Queensland:

  • From 2022 to 2027, current renewables projects alone could offer 11,040 jobs in construction, and 720 ongoing operations and maintenance positions.

This represents a significant opportunity, but also a stark reality check—government must do more to enable wider regional economic diversification in these communities.

Expecting renewables alone to compensate for the stable, high-paying jobs that coal has provided is unrealistic. But importantly, our analysis finds that all of the regions studied are full of untapped potential that the clean energy economy, broad diversification, private investment, and targeted government backing in vital areas can unlock. 

“Economic diversification is underway in Central Queensland—new opportunities in renewable energy and critical minerals mining exist in swathes, but more must be done to secure the region’s long-term future in a net-zero world,” said CEO David Cross.

A detailed outline of the opportunities available to Central Queensland is available in the full paper.


Breaking new ground: Challenges and opportunities of a changing energy landscape in regional Australia (Central Coast NSW)

A new Blueprint institute series takes a deep dive into the regional realities of Australia’s shift to a clean energy future—and what that will mean for communities on the ground. Alongside the already released South-West Queensland paper, they examine Central Queensland, the Latrobe Valley of Victoria, the Central Coast of NSW, and the Collie region of WA. Across these five regions—home to all our remaining coal-fired generators, and most of our coal mines—Blueprint’s analysis finds that while opportunities are abundant (in renewable energy and more broadly), and significant prospective projects are underway, uncertainty caused by a lack of definitive policy direction is hampering their development. 

In the Central Coast region of New South Wales:

  • Between 2022 and 2025, new renewable projects could offer 5,080 construction jobs, and 320 ongoing maintenance and operations positions.

This represents a significant opportunity, but also a stark reality check—government must do more to enable wider regional economic diversification in these communities.

Expecting renewables alone to compensate for the stable, high-paying jobs that coal has provided is unrealistic. But importantly, our analysis finds that all of the regions studied are full of untapped potential that the clean energy economy, broad diversification, private investment, and targeted government backing in vital areas can unlock. 

“As coal declines, New South Wales’ Central Coast has the opportunity to secure a sustainable future built around renewable energy and clean industry. But supportive state and federal policy must match local ambition,” said CEO David Cross.

A detailed outline of the opportunities available to New South Wales’ Central Coast is available in the full paper.


Breaking new ground: Challenges and opportunities of a changing energy landscape in regional Australia (Collie WA)

A new Blueprint institute series takes a deep dive into the regional realities of Australia’s shift to a clean energy future—and what that will mean for communities on the ground. Alongside the already released South-West Queensland paper, they examine Central Queensland, the Latrobe Valley of Victoria, the Central Coast of NSW, and the Collie region of WA. Across these five regions—home to all our remaining coal-fired generators, and most of our coal mines—Blueprint’s analysis finds that while opportunities are abundant (in renewable energy and more broadly), and significant prospective projects are underway, uncertainty caused by a lack of definitive policy direction is hampering their development. 

While Western Australia’s Collie region lacks any confirmed upcoming renewable energy projects, the region has much to offer—both in energy generation and more broadly.

The lack of current projects is a stark reality check—government must do more to enable wider regional economic diversification in this community to capture its potential.

Expecting renewables alone to compensate for the stable, high-paying jobs that coal has provided is unrealistic. But importantly, our analysis finds that all of the regions studied are full of untapped potential that the clean energy economy, broad diversification, private investment, and targeted government backing in vital areas can unlock. 

“The effort to build a prosperous future for Collie, built around clean energy, has received a massive boost with $550 million in new investment announced by the Western Australian government in June. But engagement with local stakeholders through institutions like our proposed coal adaptation authority is key to ensuring Collie’s economic future. Top-down handouts will simply not be effective,” said CEO David Cross

A detailed outline of the opportunities available to the Collie region is available in the full paper.


Untangling the NEM: A policymaker's guide to the National Electricity Market

With the rise in electricity prices, the National Electricity Market is at the front and centre of our political discourse. It is now more important than ever that our leaders understand how the NEM works.

Conjecture abounds on what happens when the wind doesn’t blow and the sun doesn’t shine, but these statements are not always consistent with the technical or economic realities of the NEM. It is a complex beast. Understanding the features of our electricity system is a prerequisite to making a reasoned contribution to energy policy.

Policymakers need to raise the level of public debate beyond baseless claims and counterclaims. Whether looking to defend or attack given policies, informed debates between decision makers are only possible when they know what they’re talking about.

This report acts as an accessible, comprehensive first port-of-call for policymakers and key stakeholders to ensure they have the facts straight when talking about, and making decisions that affect our NEM. It is designed to equip policymakers and commentators with an accessible knowledge base from which to devise or advocate for critical reform. Two critical aspects of the electricity market are outlined: the NEM's physical constraints and makeup, and the markets that govern it.


Breaking new ground: Challenges and opportunities of a changing energy landscape in regional Australia (South-West Queensland)

The emerging clean energy economy offers a window of opportunity for South-West Queensland. Capturing this potential requires a targeted and proactive policy approach that leverages the region’s entrenched advantages and lays the bedrock for sustained prosperity. Communities in South-West Queensland—including those which house our coal-fired generators—have long formed a cornerstone of our economy.

Yet, across the country, a massive change is already underway. Coal-fired generators are facing increased competition, with many set to close—unviable in the face of ever-cheaper renewable energy. And the days of insatiable global demand for our thermal coal exports are also numbered.

Such a shift should be met with optimism—not trepidation—in South-West Queensland. That’s because the region can prosper in the new energy economy. The only question is whether we have the courage and foresight to capitalise on these new opportunities.

Few nations share our combination of sunshine, wind, and access to financial and human capital. In addition, we possess an abundance of rare earth elements and critical minerals such as lithium—an essential input into the production of clean energy assets like batteries and critical technologies like computer chips.

Blueprint’s modelling indicates that approximately 6,200 new jobs in renewable energy projects will be created in South-West Queensland. Of these, nearly 1,000 are permanent, long-term positions. These are new jobs and drawn only from projects that are registered with the regulator, have commenced construction or clear construction dates, and clear funding routes.

Massive wind and solar resources have already attracted the state’s largest operational wind project, the 453MW Coopers Gap Wind Farm, and over 3,300MW committed or proposed in other projects. Workers from Tarong power station could help maintain the new Battery Energy Storage System nearby, while those at Kogan Creek could staff CS Energy’s neighbouring renewable hydrogen demonstration plant. Meanwhile, thousands of new jobs in critical minerals mining around Mount Isa will require skills similar to those already possessed by former coal miners. But to secure enduring prosperity in South-West Queensland, we cannot rely on renewable projects alone—many of the jobs they create are short-term construction jobs, with far fewer long-term stable jobs in maintenance and operations. The diversification of local employment beyond renewables—to areas such as clean industry development, critical minerals mining, auxiliary industries, as well as other emerging sectors—will be necessary to provide meaningful and stable employment to the area’s regional communities.

Lasting economic prosperity in the new energy economy is attainable in South-West Queensland, but it will require broad stakeholder collaboration, and in some cases, targeted government support. The policy required to ensure effective diversification of our regions can be found in Blueprint’s previous report—From the ground up. The report called for:

  • funding for coal adaptation authorities to be established that empower communities;
  • the establishment of a national coalfield and infrastructure renewal and repurpose strategy, in concert with state and local governments, to ensure that existing assets can be used to allow communities to pivot and adapt to new opportunities and;
  • well-designed support for workers through job search and retraining services, income insurance, and where necessary early retirement packages.

Opportunities for a prosperous future for South-West Queensland are there for the taking. Rather than bear the economic cost of our changing electricity grid, regional Australia can lead us into a new era of prosperity. Our polling shows that voters in South-West Queensland are demanding their leaders step up to the plate. We hope that this research helps policymakers to move fast and embrace these opportunities with confidence.